Prepare a budgeted income statement for next year

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Reference no: EM1314688

Prepare a budgeted Income Statement.

Mattingly Corporation sells a single product for $150 per unit. Total sales were 6,000 units. The company is considering a 10 percent price reduction in order to stay competitive. It is estimated that such a reduction will increase sales volume by 10 percent. Assume a 40 percent tax rate. Costs are budgeted as follows:

Direct material	$30 per unit
Direct labor	$20 per unit
Variable manufacturing overhead	$15 per unit
Variable selling and administrative	$10 per unit
Fixed manufacturing overhead	$100,000
Fixed selling and administrative	$80,000

Required:
Prepare a budgeted income statement for next year assuming that the company reduces prices as planned.

Reference no: EM1314688

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