Question 1 Gordon's Computer Shop sells new and used computers as well as computer accessories. Each year in December, the accountant for the business is requested to set up budget schedules detailing financing expectations for the coming year, based on information provided by management. The following estimates have been provided for the business: Pessimistic Forecast Most Likely Forecast Optimistic Forecast Sales RM200,000 RM450,000 RM680,000 Costs and expenses, classified according to their behavior in relation to sales as either Variable or Fixed are as follows: Variable Costs: Cost of Sales 60% of sales revenue Transportation Costs 2% of sales revenue Sales Commissions 4% of sales revenue Fixed Costs: Depreciation RM4,700 Insurance RM1,300 Office Supplies RM2,800 Power (Gas and Electricity) RM5,000 Rent of Shop Premises RM8,400 Salaries and Wages RM28,000 Sales Promotion Expenses RM12,000 Required: Based on the above revenue forecasts and cost and expense structures, prepare a detailed Revenue Statement Budget using flexible budgeting techniques with three estimated levels ( Pessimistic Forecast, (ii) Most Likely Forecast and (iii) Optimistic Forecast