question archive Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat
Subject:BusinessPrice:3.87 Bought7
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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 | 820 | |
| Selling price per unit | $2,130 | |
| Cost per unit | $1,500 | |
| Variable selling and administrative expenses (per unit) | $75 | |
| Fixed selling and administrative expenses (per year) | $400,000 | |
| Interest expense for the year | $29,000 | |
| Required: |
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Prepare the company’s budgeted income statement using an absorption income statement format shown below. |
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Answer:
| Budgeted Income Statement: | |||||
| Sales revenue (820 units @ 2130) | 1746600 | ||||
| Less: COGS (820 units @ 1500) | 1230000 | ||||
| Gross Margin | 516600 | ||||
| Less: Operating expenses | |||||
| Variable selling admin oh (820*75) | 61500 | ||||
| Fixed Selling admin oh | 400000 | ||||
| Net Operating income | 55100 | ||||
| Less: Interest expenses | 29000 | ||||
| Net Income | 26100 | ||||
