Author Question: Christy Enterprises reports the year-end information from 2018 as follows: Sales (100,000 ... (Read 200 times)

AEWBW · **on:** Mar 6, 2021

Question 1

When administered wisely, budgets promote communication and coordination among the various subunits of the organization.
◦ true
◦ false

Question 2

Christy Enterprises reports the year-end information from 2018 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 2019 budget. In 2019 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 2019.

mochi09 · **Reply #1 on:** Mar 6, 2021

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