Smith and Sons is developing the 2011 budget. In 2011 the company would like to

Smith and Sons is developing the 2011 budget. In 2011 the company would like to increase selling prices by 20% and as a result expects a decrease in sales volume of 10%. Cost of goods sold as a percentage of sales is expected to increase to 65%. Other than depreciation all operating costs are variable as a percentage of total sales. Prepare a budgeted income statement for 2011Additional RequirementsSales (100000 units) $400000/$100000 = $ 4 per unit $400000Less: cost of goods sold ($250000/$400000= 62.5%) 250000Gross profit (150000/250000 = .37.5) 150000Operating expenses (includes $10000 of depreciation)((110000 -10000)/100000 units = $1.00 per unit) 110000Net income (40000/400000 = 10%) $ 40000