Question

If sales and production is projected to double, what other expenses on the budgeted income statement should change?

Answer 1

The budgeted income statement is a projection of the income statement during future budget periods. It takes information from various other budgets which company made for its future predictions. The budgeted income statement is consisting of sales projections, production for that period, cost of goods sold, selling and administrative expenses, interest expenses etc. Therefore if sales and production is projected to double, the other expenses on the budgeted income statement should change are cost of goods sold and selling and administrative expenses of the company. If the company will increase its borrowings to support the increased production, in that case, the interest expenses should also change.