Biology Forums - Study Force

Barrieland Merchandising Firm is developing its budgets for 2016. The 2015 income statement is as follows:

Sales (100,000 units)   $250,000
Less: Cost of goods sold   150,000
Gross profit    $100,000
Operating expenses (includes
$10,000 of depreciation)   60,000
Net income   $40,000

Selling prices will increase by 10 percent and sales volume in units will decrease by 5 percent. The cost of goods sold as a percent of sales will increase to 62 percent. Other than amortization, all operating costs are variable.

Required:
Prepare a budgeted income statement for 2016.

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