Managerial Accounting: P22-43A Soya Company prepared the following budgeted income statement

Managerial Accounting
P22-43A Using sensitivity analysis
Soya Company prepared the following budgeted income statement for the first quarter of 2016: 
Soya Company
Budgeted Income Statement
For the Quarter Ended March 31, 2016
January February March Total
Sales Revenue (20% increase per month) 8,000 9,600 11,520 29,120
Cost of Goods Sold (40% of sales) 3,200 3,840 4,608 11,648
Gross Profit 4,800 5,760 6,912 17,472
S&A Expenses ($2,000 + 10% of sales) 2,800 2,960 3,152 8,912
Operating Income 2,000 2,800 3,760 8,560
Income Tax Expense (30% of Operating Income) 600 840 1,128 2,568
Net Income $1,400 $1,960 $2,632 $5,992
Soya Company is considering two options.
Option 1 is to increase advertising by $1,200 per month.
Option 2 is to use better-quality materials in the manufacturing process. The better materials will increase the cost of goods sold to 45% but will provide a better product at the same sales price.
The marketing manager projects either option will result in sales increases of 25% per month rather than 20%. 

Requirements 
1. Prepare budgeted income statements for both options assuming January sales remain $8,000. Round all calculations to the nearest dollar. 
2. Which option should Soya choose? Explain your reasoning. 
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