Thomas Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,000,000. The total unit cost is $22. Selling and administrative expenses are expected to be $300,000. Income taxes are estimated to be 25% of income from operations. What is the company's budgeted net income?

Net operating income = 450,000

Explanation:

Giving the following information:

The sales budget for the year shows 50,000 units and total sales of $2,000,000. The total unit cost is $22. Selling and administrative expenses are expected to be $300,000.

Tax rate = 25%

We need to do an income statement:

Sales = 2,000,000

Cost of goods sold = (50,000*22) = (1,100,000)

Gross profit = 900,000

Selling and administrative expenses = (300,000)

Income before tax = 600,000

Tax = (0,25*600,000) = (150,000)

Net operating income = 450,000