Hardin Fabrications is preparing its master budget for the third quarter.

Average sales price of merchandise $220

Average ingots of steel per unit	3.5
Cost of one steel ingot	$ 17.00

Direct labor hours per unit	1.5
Direct labor rate per hour	$ 19.00

Projected Sales in Units
January	1,500
February	1,875
March	1,750
April	2,000
May	1,200
June	1,900
July	2,250
August	2,100
September	1,650
October	3,200
November	1,400
December	1,900

Variable overhead per unit produced	$ 40.00
Fixed overhead per year	$ 96,000

Selling expense per unit sold	$ 18.00
Fixed administrative expense per year	$ 125,000

Capacity for the year 25,000

% of next month's sales in production ending inventory	30%
% of next month's production in materials ending inventory	25%

Units on hand July 1	500
Steel ingots on hand July 1	2,083

Required:

Create the Operating Budget and Budgeted Income Statement for the third quarter.

Note: Do not use the ROUND() function.