Question: Procter & Gamble Co. is preparing its budget for the upcoming fiscal year. The company expects the following: Sales: $80 billion Cost of Goods Sold:


Procter & Gamble Co. is preparing its budget for the upcoming fiscal year. The company expects the following:


    • Sales: $80 billion
    • Cost of Goods Sold: 55% of sales
    • Operating Expenses: 25% of sales
    • Interest Expense: $2 billion
    • Tax Rate: 22%

Requirements:


    1. Prepare the budgeted income statement.
    2. Calculate the budgeted net income.
    3. Determine the budgeted gross profit.
    4. Compute the budgeted operating profit.
    5. Evaluate the impact of a 5% increase in sales on net income.

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