B&B, Inc. is preparing its master budget for the first quarter of its calendar year. The following
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Question:
B&B, Inc. is preparing its master budget for the first quarter of its calendar year. The following forecasted data relate to the first quarter:
Unit sales: | |
January | 40,000 |
February | 55,000 |
March | 50,000 |
Unit sales price | $25 |
Cost of goods sold per unit | $13 |
Expenses: | |
Commissions | 10% of sales |
Rent | $20,000/month |
Advertising | 15% of sales |
Office salaries | $75,000/month |
Depreciation | $50,000/month |
Interest | 15% annually on a $250,000 note payable |
Tax rate | 40% |
Prepare a budgeted income statement for this first quarter.
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