Gig Harbor Boating is the wholesale distributor of a small recreational catamara

Question

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 Selling price per unit Cost per unit Variable selling and administrative expenses (per unit) Fixed selling and administrative expenses (per year) Interest expense for the year 600 $2,020 $1,670 $55 S107,000 $18,000 Required: Prepare the company's budgeted income statement using an absorption income statement format shown below Gig Harbor Boating Budgeted Income Statement

Explanation / Answer

Gig Harbor Boating

Budgeted Income Statement

Sales(600 units × $2,020 per unit) $1,212,000 Cost of goods sold(600 units × $1,670 per unit) $1,002,000 Gross margin $210,000 Selling and administrative expenses[(600 units × $55 per unit) + $107,000] $140,000 Net operating income $70,000 Interest expense $18,000 Net income $52,000

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.