Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October:
| Sales revenue (300 units @ $600 per unit) | $180,000 |
| Less | |
| Manufacturing costs | |
| Variable costs | $26,000 |
| Depreciation (fixed) | $27,540 |
| Marketing and administrative costs | |
| Fixed costs (cash) | $67,500 |
| Depreciation (fixed) | $22,860 |
| Total costs | $143,900 |
| Operating profits | $36,100 |
Sales valume is expected to increase by 20% in November, but the sales price is expected to fall 10%. Variable manufacturing costs are expected to increase by 4% per unit in November. In addition to these cost changes, variable manufacturing casts also will change with sales volume. Marketing and administrative cash costs are expected to increase by 8%.
Cycle-1 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 November.