HiTutor,

Kindly,help me in following question.

AS HereWeGowill set up the performance budget for next year based on the information listed below.

1.The sale next year is expected to be NOK 26,000 including VAT (VAT).

2.No change is planned for the inventory next year and the item purchase is expected to be $12,000 including VAT.

3.Wages and social expenses are estimated to be NOK 2,000.

4.Other operating expenses are expected to be NOK 4,000 including VAT.

5.Depreciation next year is expected to be NOK 1,400.

6.Interest costs will be NOK 800.

7.The tax rateis 22%.

8.Value added tax is 25%.

AS HereWeGoasks you for help setting up your performance budget. The company wishes that the operating profit is clearly stated in the profit budget.