BAM Inc. has just received its sales and expense report for May, which follows.

Item Amount

Sales commissions $300,000

Sales staff salaries 100,000

Telephone and mailing 50,000

Building lease payment 50,000

Heat, light, and water 10,000

Packaging and delivery 40,000

Depreciation 40,000

Marketing consultants 20,000

Sales 800,000

You have been asked to develop budgeted costs for the coming year. Since this month is typical, you decide to prepare an estimated budget for a typical month in the coming year and you uncover the following additional data:

• Sales volume is expected to increase by 10 percent.
• Sales prices are expected to decrease by 8 percent.
• Commissions are based on a percentage of selling price.
• Sales staff salaries will increase 15 percent next year regardless of sales volume.
• Building rent is based on a five-year lease that expires in three years.
• Telephone and mailing costs are scheduled to increase by 5 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.
• Heat, light, and water are scheduled to increase by 15 percent regardless of sales volume.
• Depreciation includes furniture and fixtures used by the sales staff. No additions or retirements are expected.
• Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, the costs are expected to average $25,000 per month.

Required:

Prepare BAMs pro-forma operating statement for a typical month in the coming year.