Exercise 7-24 (Static) Budgeted income statement LO P3 Fortune Incorporated 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 budgeted at 150,000 for the first quarter. Cost of goods sold is $14 per unit. Other expense information for the first quarter follows. Sales Commissions 8% of sales dollars Rent $ 42,000 Advertising $ 562,500 per quarter per quarter Office salaries $ 225,000 per quarter Depreciation $ 120,000 Interest Tax rate per quarter 1.25% quarterly on $250,000 note payable 30% Prepare a budgeted income statement for the first quarter ended March 31 Note: Round your intermediate and final answers to the nearest whole dollar. FORTUNE, INCORPORATED Budgeted Income Statement For Quarter Ended March 31 Selling, general and administrative expenses 0 0

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Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making. 

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.