Gig Harbor Boating is the wholesale distributor of a small r

Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales Selling price per unit Cost per unit Variable selling and administrative expense (per unit) Fixed selling and administrative expense (per year) $345,e00 Interest expense for the year 740 2,09e $ 1,490 25,000 Required: Prepare the company\'s budgeted income statement for the year. Gig Harbor Boating Bud Statement to search

Solution

Budgeted income statement

sales [740 * $2090] = $1546600

less: cost of goods sold [740 * $1490] = 1102600   

   Gross margin = $444000

less: Total selling and administrative expense

[(740*$80) + $345000] = 404200

   Net operating income = 39800

less: Interest expense = 25000

Net income = $14800

Note:- Total selling and administrative expense = variable selling and administrative expense and fixed selling and administrative expense