Prepare the company''s budgeted income statement

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Reference no: EM131707158

The board of directors of Southwest Manufacturing Company recently approved the company's budget and production plan for its coming fiscal year, 20X7. Budgeted units of production equal budgeted unit sales for the company's single product. Using the information below, included in the budget and production plan:

a. Compute the amount of required sales - number of units and dollars - necessary to achieve the company's budgeted net income for its fiscal year ended (FYE) December 31, 20X7

b. Prepare the company's budgeted income statement for its FYE December 31, 20X7 using the Variable Costing Method (Contribution Margin Format).

Budgeted amounts:

 

Budgeted amounts:

Per unit

Sales units

?

Product selling price (SP)

$280.00

Sales dollars

?

Variable manufacturing costs:

 

Fixed costs:

 

Direct materials (DM)

$62.50

Manufacturing overhead (MOH) costs

$3,150,000

Direct labor (DL)

$52.00

Selling and administrative (S&A) costs

$3,375,000

Manufacturing overhead (MOH) costs

$75.50

Research and development (R&D) costs

$2,250,000

Variable selling and admin. (S&A) costs

$50.00

Net income

$2,835,000

Estimated combined effective tax rate

40.0% (i.e., 0.40)

a. Amount of required sales - number of units and dollars - necessary to achieve the company's budgeted net income for its fiscal year ended (FYE) December 31, 20X7:

b. Prepare the company's budgeted income statement for its FYE December 31, 20X7 using the Variable Costing Method (Contribution Margin Format)

Reference no: EM131707158

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