Question

North Company has completed all of its operating budgets. The sales budget for the year shows 50,820 units and total sales of $2,391,000. The total unit cost of making one unit of sales is $23. Selling and administrative expenses are expected to be $303,100. Interest is estimated to be $13,060. Income taxes are estimated to be $220,400.

Required:
Prepare a budgeted multiple-step income statement for the year ending December 31, 2017.

Answer 1

Answer: Sales 2,250,000

Explanation:

variable cost 1,250,000

25 x 50,000

Gross Profit 1,000,000

Fixed Cost

Selling & Administrative 300,000

Operating income 700,000

interest expense

10,000

non- controllable expenses 10,000

non-controllable income 690,000

income taxes 200,000

net income 490,000

Explanation:

the interest expense is not part of the operating cost, those cost are not part of the business activity. It is on the non-controllable expenses