Roxana Sims is the budget director for Walker House, Inc., a multinational company based in Maryland. Walker House, Inc., organizes and coordinates art shows and auctions throughout the world. Budgeted and actual costs and expenses for 2015 are compared in the following schedule.

Required:

a) Prepare the company?s budgeted income statement for 2016.

b) Should the budget director be worried about the trend in the company?s operations? Be specific.