Highjinks Corporation's sales department has estimated revenue of 250,000 for your division. 60% of this will be achieved in the first half-year and 40% in the remaining half-year. Variable operating costs are typically 30% of revenue and fixed operating costs are expected to be \($35,000\) per month for the first six months and \($40,000\) per month thereafter.

The selling expense allocated to your department from the sales department is \($15,000\) per month for the first half-year; thereafter, \($12,000.\) Salaries are \($25,000\) per month, depreciation is

\($5,000\) per month, and rent is \($8,000\) per month. Light, heat, and power are expected to cost \($3,000\) per month for the first half-year, falling to \($2,000\) thereafter.

a. Construct a budget for the year based on the above figures.

b. What can you say about the rate of gross profit?