Mini-Case 12-5: a Projected Income Statement

question 113

Essay

Mini-Case 12-5: A Projected Income Statement
You want to start your own retail furniture store, and you have already gathered a great deal of information on location, layout, form of ownership, business failure rates, etc. In applying for a loan, you notice that a projected income statement is required. Your problem is to complete this projected "P&L," given a desired income of $23,000 and the following published statistics. Show and clearly label all of your work!
Cost of Goods Sold 60.3 percent of net sales
Operating Expenses 36.4 percent of net sales
Gross Profit Margin 39.7 percent of net sales
-If a market survey indicates that your firm's sales would be $620,000, what net profit would you expect to earn?

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Definitions:

Equal Pay

The legal or ethical principle requiring that employees be paid the same wage for similar work regardless of gender, age, ethnicity, or other non-performance related factors.

Comparable Worth

The principle of equal pay for work of equal value, regardless of the gender or status of the worker.

Federal Employment Discrimination Laws

Laws that protect employees from discrimination in the workplace based on race, color, religion, sex, national origin, age, disability, or genetic information.

Closed Shop

A workplace arrangement where only employees who are union members are hired, often found in collective bargaining agreements.