Francis Sales reports 2016 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
Francis’ Accounting staff is developing the 2017 budget. In 2017, 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 2017.