Problem - 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 36,000 for January, 56,000 for February, and 46,000 for March. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows.
Commissions 8% of sales dollars Rent$15,000 per month Advertising 10% of sales dollars Office salaries$79,000 per month Depreciation$53,000 per month Interest 13% annually on a $270,000 note payable Tax rate 40%
Required - Prepare a budgeted income statement for this first quarter.