Zulu, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 40,000 for January, 60,000 for February, and 50,000 for March. Cost of goods sold is $14 per unit. Other expense information for the first quarter follows. Prepare a budgeted income statement for this first quarter
Commissions . . . . . . . . . 10% of sales
Rent . . . . . . . . . . . . . . . . $20,000 per month
Advertising . . . . . . . . . . 15% of sales
Office salaries . . . . . . . . $75,000 per month
Depreciation . . . . . . . . . $50,000 per month
Interest . . . . . . . . . . . . . 15% annually on a $250,000 note payable
Tax rate . . . . . . . . . . . . . . 40%