Question

Widget Manufacturing Company is preparing a profit budget and has projected that net sales will equal $470,000 for the period and that fixed manufacturing costs will be $150,000. Additionally, Widget expects variable manufacturing costs to be 35% of net sales. Widget manufacturing expects no changes to any inventory values from the beginning of the period to the end of the period. Use this information to determine Widget Manufacturing Company's budgeted gross profit. En g

Answer 1

Answer:

the Widget Manufacturing Company's budgeted gross profit is $155,500

Explanation:

The computation of the Widget Manufacturing Company's budgeted gross profit is shown below:

Value of Opening inventory = Value of Closing inventory

As we know that  

Gross profit = Sales- Variable Expenses- Fixed cost

= $470,000 - $164,500(35% of $470,000 ) -$150,000

= $155,500

Hence, the Widget Manufacturing Company's budgeted gross profit is $155,500