TASK 1, 500 words equivalent, 30 marks

Prepare a report on the preparation of an incremental budget for 5 years. You need to provide preliminary data to begin with the budget calculation. The structure of the report follows:

1. Introduction
   • Briefly discuss the concept of incremental budget
   • Briefly discuss the preparation of income statement budget

2. Financial Assumptions
   • Complete the following baseline data. You can decide on your own.

Item	Baseline data
Annual sales volume
Selling price
Finished goods inventory
Cost of production
Selling and admin expenses
Selling expenses
Admin expenses
Other expenses

• Complete the following incremental assumptions. You can decide on your own.

Item	Percent of Annual Increase
Annual sales volume
Selling price
Finished goods inventory
Cost of production
Selling and admin expenses
Selling expenses
Admin expenses
Other expenses

3. Evaluation

After you have completed the Task 2, evaluate the results of your income statement budget.