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Projected income statement

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1. New Company has the capacity to produce 5,000 units per year. Its predicted operations for the year are:

Sales 4,000 units @ $20 each $80,000
Manufacturing costs:
Variable $5 per unit
Fixed $10,000
Marketing and administrative costs:
Variable $1 per unit
Fixed $8,000

A. Prepare a projected income statement for the year.

B. Should the company accept a special order for 500 units at a selling price of $8? What is the impact of this decision on profits?

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This provides the steps to prepare projected income statement

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1. New Company has the capacity to produce 5,000 units per year. Its predicted operations for the year are:

Sales 4,000 units ...

Purchase this Solution
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