Starlite Company manufactures office products. Last year, it sold 20,000 e

Exercise 13-18 Estimate Sales Revenues (L.O. 3)

Starlite Company manufactures office products. Last year, it sold 20,000 electric staplers for $25 per unit. The company estimates that this volume represents a 25 percent share of the current electric stapler market. The market is expected to increase by 10 percent next year. Marketing specialists have determined that as a result of new competition, the company’s market share will fall to 20 percent (of this larger market). Due to changes in prices, the new price for the electric staplers will be $26 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates.

Required:

Estimate Starlite’s sales revenues from electric staplers for the coming year. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Exercise 13-30 Prepare Budgeted Financial Statements (L.O.6)

Rhodes, Inc., is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for July:

  Revenues (210 units @ $520 per unit)

$

109,200  

  Less

    Manufacturing costs

      Variable costs

15,300  

      Depreciation (fixed)

16,200  

    Marketing and administrative costs

      Fixed costs (cash)

37,500  

      Depreciation (fixed)

13,700  

    Total costs

$

82,700  

  Operating profits

$

26,500  

Sales volume is expected to increase by 20 percent in August, but the sales price is expected to fall 10 percent. Variable manufacturing costs are expected to increase by 3 percent per unit in August. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 5 percent.

     Rhodes operates on a cash basis and maintains no inventories. Depreciation is fixed and should remain unchanged over the next three years.

Required:

Prepare a budgeted income statement for August. (Do not round intermediate calculations. Input all amounts as positive values. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)