Gig Harbor Boating is the wholesale distributor of a small recreational catamara

Question

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 yean 520 $1,980 $1,660 60 $ 105,000 $14,000 Required Prepare the company's budgeted income statement for the year. Gig Harbor Boating Budgeted Income Statement

Explanation / Answer

Budgeted income statement :

Sales (520*1980) 1029600 Cost of goods sold (520*1660) -863200 Gross profit 166400 Selling and administrative expense (520*60+105000) -136200 Operating income 30200 Interest expense -14000 Net income 16200

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