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 sales760Selling price per unit$ 2,100Cost per unit$ 1,690Variable selling and administrative expense (per unit)$ 90Fixed selling and administrative expense (per year)$ 200,000Interest expense for the year$ 26,000 Required:Prepare the company’s budgeted income statement for the year. ### Gig Harbor Boating Budgeting ExerciseGig 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:** 760 **Selling Price per Unit:** $2,100 **Cost per Unit:** $1,690 **Variable Selling and Administrative Expense (per Unit):** $90 **Fixed Selling and Administrative Expense (per Year):** $200,000 **Interest Expense for the Year:** $26,000 #### Required:Prepare the company’s budgeted income statement for the year.**Instructions:**Complete the following budgeted income statement template for Gig Harbor Boating: Gig Harbor Boating Budgeted Income Statement Sales Cost of Goods Sold Gross Margin Variable Selling and Administrative Expenses Fixed Selling and Administrative Expenses Net Operating Income Interest Expense Net Income ### Guide to Completing the Budgeted Income Statement1. **Sales:** Calculate by multiplying the budgeted unit sales by the selling price per unit.2. **Cost of Goods Sold:** Calculate by multiplying the budgeted unit sales by the cost per unit.3. **Gross Margin:** Subtract the Cost of Goods Sold from Sales.4. **Variable Selling and Administrative Expenses:** Calculate by multiplying the budgeted unit sales by the variable selling and administrative expense per unit.5. **Fixed Selling and Administrative Expenses:**

Variable cost varies with production and remains same per unit . Fixed cost on the other hand…

Answered: Sig Harbor Boating is the wholesale…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	760
Selling price per unit	$ 2,100
Cost per unit	$ 1,690
Variable selling and administrative expense (per unit)	$ 90
Fixed selling and administrative expense (per year)	$ 200,000
Interest expense for the year	$ 26,000

Required:

Prepare the company’s budgeted income statement for the year.

### Gig Harbor Boating Budgeting Exercise

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:** 760
**Selling Price per Unit:** $2,100
**Cost per Unit:** $1,690
**Variable Selling and Administrative Expense (per Unit):** $90
**Fixed Selling and Administrative Expense (per Year):** $200,000
**Interest Expense for the Year:** $26,000

#### Required:
Prepare the company’s budgeted income statement for the year.

**Instructions:**
Complete the following budgeted income statement template for Gig Harbor Boating:

<div>
<table border="1">
<tr>
<th colspan="2">Gig Harbor Boating</th>
</tr>
<tr>
<th colspan="2">Budgeted Income Statement</th>
</tr>
<tr>
<td>Sales</td>
<td></td>
</tr>
<tr>
<td>Cost of Goods Sold</td>
<td></td>
</tr>
<tr>
<td>Gross Margin</td>
<td></td>
</tr>
<tr>
<td>Variable Selling and Administrative Expenses</td>
<td></td>
</tr>
<tr>
<td>Fixed Selling and Administrative Expenses</td>
<td></td>
</tr>
<tr>
<td>Net Operating Income</td>
<td></td>
</tr>
<tr>
<td>Interest Expense</td>
<td></td>
</tr>
<tr>
<td>Net Income</td>
<td></td>
</tr>
</table>
</div>

### Guide to Completing the Budgeted Income Statement
1. **Sales:** Calculate by multiplying the budgeted unit sales by the selling price per unit.
2. **Cost of Goods Sold:** Calculate by multiplying the budgeted unit sales by the cost per unit.
3. **Gross Margin:** Subtract the Cost of Goods Sold from Sales.
4. **Variable Selling and Administrative Expenses:** Calculate by multiplying the budgeted unit sales by the variable selling and administrative expense per unit.
5. **Fixed Selling and Administrative Expenses:**

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