As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y4, the following tentative trial balance as of December 31, 20Y3, is prepared by the Accounting Department of Regina Soap Co.:

Cash	$101,500
Accounts Receivable	190,800
Finished Goods	40,100
Work in Process	26,700
Materials	43,900
Prepaid Expenses	3,200
Plant and Equipment	501,400
Accumulated DepreciationPlant and Equipment			$215,600
Accounts Payable			172,400
Common Stock, $10 par			250,000
Retained Earnings			269,600
	$907,600		$907,600

Factory output and sales for 20Y4 are expected to total 25,000 units of product, which are to be sold at $100 per unit. The quantities and costs of the inventories at December 31, 20Y4, are expected to remain unchanged from the balances at the beginning of the year.

Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:

	Estimated Costs and Expenses
	Fixed (Total for Year)		Variable (Per Unit Sold)
Cost of goods manufactured and sold:
Direct materials	_		$25
Direct labor	_		8
Factory overhead:
Depreciation of plant and equipment	$25,000		_
Other factory overhead	7,800		4.5
Selling expenses:
Sales salaries and commissions	89,800		12.5
Advertising	75,000		_
Miscellaneous selling expense	6,500		2
Administrative expenses:
Office and officers salaries	59,000		6.5
Supplies	3,000		1
Miscellaneous administrative expense	1,600		1.5

Balances of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of $212,200 on 20Y4 taxable income will be paid during 20Y4. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 25,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $135,000 cash in May.

Regina Soap Co. Budgeted Income Statement For the Year Ending December 31, 2014 Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries and commissions Advertising Miscellaneous selling expense Total selling expenses Administrative expenses: Office and officers salaries Supplies Miscellaneous administrative expense Total administrative expenses Total operating expenses Income before income tax Income tax expense Net income Regina Soap Co. Budgeted Balance Sheet December 31, 2014 Assets Current assets: Inventories: 3 Total current assets Property, plant, and equipment: Total assets Liabilities Current liabilities: Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity