Budgeting and Cost Variance Analysis Master Budget Sales and variable costs of sales are expected to increase by 7 percent in the next quarter. All sales are on credit 50 percent collected in the quarter of sale and 50 percent collected in the following quarter. Variable cost of sales consists of 40 percent materials , 40 percent direct labor, and 20 percent variable overhead . Materials are purchased on credit Sixty percent are paid for in the quarter purchase and the remaining amount is paid for in the quarter after purchase . There is no Inventory . Also , direct labor and variable overhead costs are paid in the quarter the expenses are incurred Fixed production costs other than $ 5,000 of depreciation expense )are expected to increase by 1.5 percent . Fixed production costs requiring payment are paid in the quarter they are incurred Fixed selling and administrative costs other than $ 3,000 of depreciation expense ) are expected to increase by 3 percent Fixed selling and administrative costs requiring payment are paid in the quarter they are incurred The tax rate is expected to be 40 percent . All taxes paid in the quarter they are incurred No purchases of fixtures or equipment are expected in the first quarter of 2015 Based on this information . perform the following tasks Prepare a budgeted income statement for the first quarter of 2015 Prepare a budgeted statement of cash budget for the first quarter of the next year Prepare a budgeted balance sheet as of the end of the first quarter of the next year