ECON 261 Lecture Notes - Lecture 20: Income Statement
Document Summary
Such an income statement may contribute to determining the feasibility of any business plans (timoshenko, 2010). Through the budgeted income statement, a business may be able to develop and compare different budget projections that may help in making decisions about the best projects to be pursued. Nettle is the company that prepares the budgeted income statement on a quarterly basis. The appendix below illustrates the company"s budgeted income statement for the first quarter of. The first option is increase advertising by ,000. The second option is to use better-quality materials in the manufacturing process. The better materials will make the cost of goods sold increase by 25%. However, such an increase will provide a better product at the same sales price. According to the marketing manager"s projection, either of options will increase sales of 25% instead of 20%. The appendix a below illustrates the budgeted income statement under option one. The sales revenue has increased in three months.
