value 10.00 points Gig Harbor Boating is the wholesale distributor of a small re

Question

value 10.00 points 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 expenses (per unit) Fixed selling and administrative expenses (per year) Interest expense for the year 500 $1,970 $1,460 $50 $196,000 $13,000 Required: Prepare the company's budgeted income statement using an absorption income statement format Gig Harbor Boating Budgeted Income Statement HintsReferences eBook & Resources Hint#1 Check my Work

Explanation / Answer

Gig Harbor Boating

Budgeted Income Statement

Sales(500 units × $1,970 per unit) $985,000 Cost of goods sold(500 units × $1,460 per unit) ($730,000) Gross margin $255,000 Selling and administrative expenses(500 units × $50 per unit) + $196,000 ($221,000) Net operating income $34,000 Interest expense ($13,000) Net income $21,000

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