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Microsoft is planning to launch a new software product. The following budgeted information is available: Sales Revenue: $5,000,000 Cost of Goods Sold: $2,000,000 Operating Expenses:
Microsoft is planning to launch a new software product. The following budgeted information is available:
- Sales Revenue: $5,000,000
- Cost of Goods Sold: $2,000,000
- Operating Expenses: $1,000,000
- Research and Development Expenses: $500,000
- Marketing Expenses: $700,000
Requirements:
- Prepare the Budgeted Income Statement for the new product.
- Calculate the expected Net Profit.
- Prepare a Flexible Budget for sales revenue scenarios of $4,000,000, $5,000,000, and $6,000,000.
- Perform a variance analysis comparing the flexible budget with the actual results if actual sales were $4,500,000.
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