Purchases Assumptions $($for Purchases Budget$)$

Ending Inventory is $50\%$ of Next Month's Cost of Goods Sold

COGS Jan Year $2-$ $$9,500$; COGS Jan Year $3-$ $$9,675$; COGS Jan Year $4-$ $$11,250$

Operating Expenses $($Paid in the month of the expense$)$

Selling Expenses:

Variable

Salaries

Distribution Expenses:

Variable

Salaries

Administrative Expenses:

Salaries

Income Tax Rate $=25\%$

$3\%$ of Sales

$$1,500$

$1\%$ of Sales

$$850$

$$2,500$