The attached information is available for 20X0 for Gehrig Corporation. For year 20X1, the company expects the following changes to occur.

GEHRIG CORPORATION EXPECTED CHANGES IN COMPANY OPERATIONS FOR FISCAL YEAR 20X1 (1) Fixed manufacturing overhead is expected to increase by 5 percent. (2) Direct materials and direct labor are both expected to increase by 8 percent. (3) Variable manufacturing overhead is expected to be 200% of the direct labor cost. (4) Variable selling expenses will change by the same percentage as the change in the volume of sales. (5) Variable administrative expenses are expected to increase by 10 percent. (6) Sales volume is expected to increase by 18 percent but prices are expected to fall by 5 percent. (7) No other changes in expenses are expected.

REQUIRED: Using last year's information and the expected changes for the current year, prepare a budgeted income statement for the company for year 20X1.

GEHRIG CORPORATION REVENUE AND COST INFORMATION FOR YEAR 20X0 Revenue (100,000 units) $ 700,000 Manufacturing Costs: Direct Materials 42,000 Direct Labor 35,000 Fixed Manufacturing Overhead 253,000 Variable Manufacturing Overhead 75,000 Selling and Administrative Expenses: Variable Selling Expenses 110,000 Fixed Selling Expenses 35,000 Variable Administrative Expenses 20,000 Fixed Administrative Expenses 130,000