Rolling budgets help management to ________. A) better review ...

[eruditmonkey@yahoo.com]

Rolling budgets help management to ________.
 
  A) better review the past calendar year
  B) deal with a 5-year time frame
  C) focus on the upcoming budget period
  D) rigidly administer the budget

Question 2

Christy Enterprises reports the year-end information from 2015 as follows:
 
  Sales (100,000 units) 500,000
   Less: Cost of goods sold 300,000
   Gross profit 200,000
   Operating expenses (includes 20,000 of Depreciation) 120,000
   Net income  80,000
 
  Christy is developing the 2016 budget. In 2016 the company would like to increase selling prices by 10, and as a result expects a decrease in sales volume of 5. Cost of goods sold as a percentage of sales is expected to increase to 62. Other than depreciation, all operating costs are variable.
 
  Required:
  Prepare a budgeted income statement for 2016.

[epscape]

Answer to Question 1

Answer: C

Answer to Question 2

Answer: Christy Enterprises
Budgeted Income Statement
For the Year 2016

Sales (95,000  5.50) 522,500
Cost of goods sold (2016 sales  62) 323,950
Gross profit 198,550
Less: Operating expenses (1.00  95,000 + 20,000) 115,000
Net income  83,550

[eruditmonkey@yahoo.com]

YES! Correct, THANKS for helping me on my review

[ghepp]

Thanks for the timely response, appreciate it