b. Connor Inc. has gathered the following budgeting Information for next year and has asked you to prepare their master budget Sales for the final quarter of the prior year total 1,700 units. Expected sales (in units) for the current year are: 1.530 (Quarter 1), 1.020 (Quarter 2). 1,360 (Quarter 3), and 1,360 (Quarter 4). Sales for the first quarter of the following year total 2.040 units. The selling price is $500 per unit In the first three quarters of the year, and $530 per unit In the final quarter. Company policy calls for a given quarter's ending finished goods Inventory to equal 50% of the next quarter's expected unit sales. The finished goods Inventory at the end of the prior year is 765 units, which complies with the policy. The product's manufacturing cost is $199 per unit, Including per unit costs of $120 for materials (8 lbs. at $15 per lb.). $54 for direct labor (3 hours $18 direct labor rate per hour). $21 for variable overhead, and $4 for fixed overhead. Annual fixed overhead consists, Incurred evenly throughout the year, consist of depreciation on production equipment, $8,800; factory utilities, $11,100, and other factory overhead of $2,200. Company policy also calls for a given quarter's ending raw materials Inventory to equal 30% of next quarter's expected materials needed for production. The prior year-end Inventory is 3.060 lbs of materials, which complies with the policy. The company expects to have 4.896 lbs. of materials In Inventory at year-end. The company has no work in process Inventory at the end of any quarter. Sales representatives commissions are 18% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $94.000 in the first three quarters of the year, and $100,000 in the final quarter. Quarterly general and administrative expenses Include $40.000 administrative salaries, rent expense of $24.000 per quarter, Insurance expense of $19.000 per quarter, straight- line depreciation of $19.000 per quarter, and 1% monthly Interest on the $150.000 long-term note payable (12% annually. f. Income taxes will be assessed at 35%, and are paid in the quarter Incurred. C. d. e. Sales Budget Production Direct Mtls Budget Budget Direct Lor Budget Factory OH Selling Exp Admin Exp Budget Budget Budget Cost of Goods Sold Income Statement Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Budget Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the Budgeted Income Statement for the year for Connor Inc. Interest on the $150,000 long-term note payable is 1% per month (12% annually). Income taxes will be assessed at 35%, and are paid in the quarter incurred. Connor Inc. Budgeted Income Statement For the year ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Interest expense Total operating expenses Income before income taxces Income tax expense Net income