Question - This is for a cost accounting study guide for the final. I have one question I am not sure on... Please help
Bob's Sales reports 2011 year-end information:
Sales (150,000 units) $450,000
Cost of Goods Sold $150,000
Gross Profit $300,000
Operating Expenses $100,000 (includes $25,000 of depreciation)
Net Income $200,000
Bob's Accounting staff is developing the 2012 budget. In 2012, the company expects to increase selling prices by 20% and as a result expects a decrease in sales volume of 10%. Cost of Goods Sold as a percentage of sales is expected to increase to 40%. Other than depreciation, all operating costs are variable.
Required: Prepare a budgeted income statement for 2012.