Fortune, Inc., is preparing its master budget for the first quarter. The company
ID: 2550150 • Letter: F
Question
Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 41,000 for January, 61,000 for February, and 51,000 for March. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows.
Prepare a budgeted income statement for this first quarter. (Round your final answers to the nearest whole dollar.)
Explanation / Answer
Total budgeted unit sales for the quarter
Jan
41,000
Feb
61,000
Mar
51,000
Total
153,000
FORTUNE, INC.
Budgeted Income Statement
For Quarter Ended March 31
Sales Revenue (153,000*$25)
$3,825,000
Less: Cost of goods sold (153,000*12)
$1,836,000
Gross profit
$1,989,000
Other Expenses:
Commissions (9%*3,825,000)
$344,250
Rent (18,000*3months)
$54,000
Advertising (13%*3,825,000)
$497,250
Office salaries (72,000*3)
$216,000
Depreciation (53,000*3)
$159,000
Interest (240,000*13%*3/12)
$7,800
$1,278,300
Net profit (Gross profit-Other exp)
$710,700
Less: Tax " 30%
$213,210
Net profit after tax
$497,490
Total budgeted unit sales for the quarter
Jan
41,000
Feb
61,000
Mar
51,000
Total
153,000
FORTUNE, INC.
Budgeted Income Statement
For Quarter Ended March 31
Sales Revenue (153,000*$25)
$3,825,000
Less: Cost of goods sold (153,000*12)
$1,836,000
Gross profit
$1,989,000
Other Expenses:
Commissions (9%*3,825,000)
$344,250
Rent (18,000*3months)
$54,000
Advertising (13%*3,825,000)
$497,250
Office salaries (72,000*3)
$216,000
Depreciation (53,000*3)
$159,000
Interest (240,000*13%*3/12)
$7,800
$1,278,300
Net profit (Gross profit-Other exp)
$710,700
Less: Tax " 30%
$213,210
Net profit after tax
$497,490