Question

Grandma's Touch Specialty Foods produces a specialty flavoured coffee that is sold to hotel chains by the case for $100 per case. For the upcoming quarter, Fairly Good Foods is projecting the following sales:

January February March

Cases of coffee 10,000 9,000 11,500

The budgeted cost of manufacturing each case is $45. Operating expenses are projected to be $110,000 in January, $105,000 in February, and $125,000 in March. Fairly Good Foods is subject to a corporate tax rate of 30%.

Required:

Prepare a budgeted income statement for the first quarter, with a column for each month and for the quarter.