Budgeted Income Statement with CVP Madison Booksellers is planning a budget for 2018. The estimate of sales revenue is $3,200,000 and of cost of goods sold is 70 percent of sales revenue. Depreciation on the office building and fixtures is budgeted at $120,000. Salaries and wages are budgeted at $200,000. Advertising has been budgeted at $180,000 and utilities should amount to $140,000. Income tax is estimated at 40 percent of operating income.

Required a. Prepare a budgeted income statement for 2018.

Use a negative sign only to indicate a net loss for income. Otherwise, do not use negative sings with your answers.

Madison Booksellers
Budgeted Income Statement
For the Year Ending Decemeber 31, 2018
Sales			Answer
Cost of goods sold			Answer
Gross margin			Answer
Sales and administrative expenses
Depreciation		Answer
Wages and salaries		Answer
Advertising		Answer
Utilities		Answer	Answer
Net income before taxes			Answer
Income taxes			Answer
Net Income (loss)			Answer

b. Assuming management desired an after-tax income of $210,000 determine the necessary sales volume.

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