Question

PB4. LO 7.2 Prepare a budgeted income statement using the information shown. Sales units 84,000 Sales price per unit Uncollectible expense Direct material per unit Direct labor hours per unit Direct labor rate per hour Manufacturing overhead Variable sales and administration expenses per unit sold Fixed sales and administration expenses $ 22 1% $ 1.50 0.8 $ 19 $14,000 $ 2.10 $23,000 15% Taxes *of income before taxes

Answer 1

Budgeted Income Statement

Sales revenue (84,000 x 22)		1,848,000
Cost of goods sold :
Direct material (84,000 x 1.50)	126,000
Direct labor (84,000 x 19 x 0.8)	1,276,800
Manufacturing overhead	14,000
Cost of goods sold		-1,416,800
Gross profit		431,200
Operating expenses :
Variable sales and administrative expenses (84,000 x 2.10)	176,400
Fixed sales and administrative expenses	23,000
Total operating expense		-199,400
Operating profit		231,800
Income tax		-34,770
Net income		$197,030

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