Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales 720 Selling price per unit $ 2,080 Cost per unit $ 1,380 Variable selling and administrative expense (per unit) $ 70 Fixed selling and administrative expense (per year) $ 400,000 Interest expense for the year $ 24,000 Required: Prepare the company’s budgeted income statement for the year.
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.
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
| Budgeted unit sales | 720 | |
| Selling price per unit | $ | 2,080 |
| Cost per unit | $ | 1,380 |
| Variable selling and administrative expense (per unit) | $ | 70 |
| Fixed selling and administrative expense (per year) | $ | 400,000 |
| Interest expense for the year | $ | 24,000 |
Required:
Prepare the company’s
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