Based on the assumptions I provided I need the budget for 2019.

ABC Company manufactures widgets and sells them through it's own sales force. The company has lost money for the last two years and the parent company of ABC has established a goal of $2.5 million in Operating Income for the next year (2019). Current year (2018) forecast of net income is as follows: Actual 2018. Budget 2018 Sales $10,000,000 $15,000,000 Variable COGS ( 4.000.000) ( 5,000,000) Fixed COGS (2.000.000) 2.000.000) Gross Margin $ 4.000.000 $ 8.000.000 Variable Selling/Admin ( 2,500,000) ( 3,000,000) Fixed Selling Admin ( 2.000.000) ( 2.500.000) Operating Income ($ 500.000) $ 2.500.000 Assignment The VP-Sales, VP-Operations and Director-Finance must sit down and agree to a budget for the next year (2019) that meets the Parent companies goal of $2,500,000 Operating Income. 50% of the next year's (2019) Incentive Bonus is based on achieving the Operating Income budget with the rest based on individual goals. VP-Operations In the past, your individual goal % for the incentive bonus was based on achievement of production goals, with a heavy penalty for not at least producing the budgeted volume/ mix of products. You expect the next year's (2019) individual goal % to be similar. You built last year's (2018) budget based on sales projections given to you by the VP-Sales however, actual product mix and volume turned out to be way off during the year. throwing off your production schedule. In last year's budget, funding for 5 additional sales people was included contingent on Operating Income hitting budget in the first few months, which didn't happen. You also think that the Sales Department is overstaffed and is extravagant with its travel and entertainment expenditures. Lastly, you think that you need more money next year to make the plant more efficient. ABC Company manufactures widgets and sells them through it's own sales force. The company has lost money for the last two years and the parent company of ABC has established a goal of $2.5 million in Operating Income for the next year (2019). Current year (2018) forecast of net income is as follows: Actual 2018. Budget 2018 Sales $10,000,000 $15,000,000 Variable COGS ( 4.000.000) ( 5,000,000) Fixed COGS (2.000.000) 2.000.000) Gross Margin $ 4.000.000 $ 8.000.000 Variable Selling/Admin ( 2,500,000) ( 3,000,000) Fixed Selling Admin ( 2.000.000) ( 2.500.000) Operating Income ($ 500.000) $ 2.500.000 Assignment The VP-Sales, VP-Operations and Director-Finance must sit down and agree to a budget for the next year (2019) that meets the Parent companies goal of $2,500,000 Operating Income. 50% of the next year's (2019) Incentive Bonus is based on achieving the Operating Income budget with the rest based on individual goals. VP-Operations In the past, your individual goal % for the incentive bonus was based on achievement of production goals, with a heavy penalty for not at least producing the budgeted volume/ mix of products. You expect the next year's (2019) individual goal % to be similar. You built last year's (2018) budget based on sales projections given to you by the VP-Sales however, actual product mix and volume turned out to be way off during the year. throwing off your production schedule. In last year's budget, funding for 5 additional sales people was included contingent on Operating Income hitting budget in the first few months, which didn't happen. You also think that the Sales Department is overstaffed and is extravagant with its travel and entertainment expenditures. Lastly, you think that you need more money next year to make the plant more efficient