[Solved] Dalley Inc

Question 110
Essay

Dalley Inc. has the following information for its first year of operations: img All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to increase by 15%, but sales prices are expected to fall by 4%. Material costs per unit are expected to decrease by 6%. Other unit variable manufacturing costs are expected to decrease by 2.5% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 6%. Variable marketing costs per unit will remain constant. Administrative costs (other than depreciation) are expected to increase by 10%. Assume there are no inventories. Dalley operates on a cash basis. Required: Prepare a budgeted income statement for year 2.

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