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) Interest expense for the year 580 $ 2,010 $ 1,470 $ 45 $ 200,000 $ 17,000 Required: Prepare the company\'s budgeted income statement for the year. Gig Harbor Boating Budgeted Income Statement

Solution

Budgeted income statement :

Sales (580*2010)	1165800
Less: Cost of goods sold (580*1470)	852600
Gross profit	313200
Less: Selling and administrative expense (580*45+200000)	226100
Operating income	87100
Less: Interest expense	17000
Net income	70100