Assume that The AM Bakery is preparing a budget for the month ending October 31. Management prepares the budget by starting with the actual results for August 31. Next, management considers what the differences in costs will be between August and October. Management expects revenue in October to be 20 percent more than in August, and it expects all ingredient costs (e.g., flour, butter, and so on) to be 20 percent higher in October than in August. Management expects "other" labor costs to be 25 percent higher in October than in August, partly because more labor will be required in October and partly because employees will receive a pay raise. The manager will receive a pay raise that will increase his salary from $4,500 in August to $5,000 in October. Rent, utilities, and marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Answer is complete but not entirely correct. THE AM BAKERY Bakery Sales Budgeted Costs For the Month Ending October 31 Ingredients Flour Butter Fruit Nuts Chocolate Other Total ingredients Labor Channel manager Other Utilities Rent Marketon Actual Budgeted (August) (October) $ 3,900 $ 4,290 3,500 1,700 3,850 1,870 O 1,300 1,430 900 990 800 880 400 440 0000000 $ 12,500 $ 13,750 $ 4,500 $ 5,000- 10,700 12,840 2,400 2,400 3,600 3,600 200 200