Question

SuperiorSuperior

SoundSound

manufactures hearing aid devices. For​ January,

SuperiorSuperior

SoundSound

expects to sell

1 comma 5001,500

hearing aid devices at an average price of

$ 2 comma 360$2,360

per unit.

SuperiorSuperior

Sound'sSound's

average manufacturing cost of each unit sold is

$ 1 comma 470$1,470.

Variable operating expenses for

SuperiorSuperior

SoundSound

will be

$ 1.70$1.70

per unit sold and fixed operating expenses are expected to be

$ 7 comma 200$7,200

for the month. Monthly interest expense is

$ 3 comma 200$3,200.

SuperiorSuperior

SoundSound

has a tax rate of

30 %30%

of income before taxes. Prepare

SuperiorSuperior

Sound'sSound's

budgeted income statement for January.

Answer 1

Superior Sound Budgeted Income Statement For the period ending January 31 Sales 3540000 Less: Variable expenses: Manufacturing cost 2205000 Operating expenses 2550 2207550 Contribution Margin 1332450 Less:Fixed Expenses 7200 Operating Expense Interest Expense 3200 10400 Income before taxes 1322050 Tax @ 30% 396615 Net Income 925435