Exercise 7-8 Budgeted Income Statement [LO7-9]

Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:

Budgeted unit sales	600
Selling price per unit	$2,020
Cost per unit	$1,670
Variable selling and administrative expenses (per unit)	$55
Fixed selling and administrative expenses (per year)	$107,000
Interest expense for the year	$18,000

Required:

Prepare the companys budgeted income statement using an absorption income statement format.

Gig Harbor Boating
Budgeted Income Statement
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Interest expense
Net income