Preparing a Budgeted Income Statement Oliver Company provided the following information for the coming year: Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $11 Variable selling and administrative expenses per unit $1.10 Fixed selling and administrative expenses $423,000 Tax rate 18 % Required: Prepare a budgeted income statement for Oliver Company for the coming year. Round all income statement amounts to the nearest dollar. Oliver Company Budgeted Income Statement For the Coming Year Sales $

Cost of goods sold

Gross margin $

Less: Variable selling and administrative expenses

Less: Fixed selling and administrative expenses

Operating income $

Less: Income taxes

Net income $

Question

Margaret Newton

Business

1 November, 00:39

Preparing a Budgeted Income Statement Oliver Company provided the following information for the coming year: Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $11 Variable selling and administrative expenses per unit $1.10 Fixed selling and administrative expenses $423,000 Tax rate 18 % Required: Prepare a budgeted income statement for Oliver Company for the coming year. Round all income statement amounts to the nearest dollar. Oliver Company Budgeted Income Statement For the Coming Year Sales $

Cost of goods sold

Gross margin $

Less: Variable selling and administrative expenses

Less: Fixed selling and administrative expenses

Operating income $

Less: Income taxes

Net income $

+1

Answers (1)

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Lorenzo Oconnor · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $11

Variable selling and administrative expenses per unit $1.10

Fixed selling and administrative expenses $423,000

Tax rate 18 %

Income Statement:

Sales = 160,000¨11 = 1,760,000

COGS = 6.30*160,000 = (1,008,000)

Gross profit = 752,000

Selling and administrative expense = (160,000*1.10) + 423,000 = (599,000)

Earning before taxes = 153,000

Tax = 153,000*0.18 = (27,540)

Net operating profit = 125,460