Question

Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management hos prepared the following summary data to use in its annual budgeting process: 360 points Budgeted unit sales Selling price per unit Cost per unit Variable selling and administrative expense (per unit) Fixed selling and administrative expense (per year) Interest expense for the year $ 2,150 $ 1,625 95 $ 335,000 $31.000 eBook Hint Print References Required: Prepare the company's budgeted Income statement for the year. Gig Harbor Boating Budgeted Income Statement of RA

Answer 1

Gig Harbor Boating

Budgeted Income Statement

Sales (860 units × $2,150 per unit)	$1,849,000
Cost of goods sold (860 units × $1,625 per unit)	$1,397,500
Gross margin	$451,500
Selling and administrative expenses [(860 units × $95 per unit) + $335,000]	$416,700
Net operating income	$34,800
Interest expense	$31,000
Net income	$3,800