1. Variable selling and administrative expenses are $1.20 per bag of coffee sold. Fixed selling and administrative expenses are $60,000 per month. These costs are not itemized, i.e., the budget has only two line items variable operating expenses and fixed operating expenses. Prepare an Operating Expenses budget.

2. Prepare a Budgeted Manufacturing Cost per unit budget. Refer to exhibit 9-11 for guidance. To calculate FMOH/unit calculate total FMOH for the year and divide this by budgeted production for the year. The total production volume for the year is budgeted at 720,000 bags.

3. Prepare a Budgeted Income Statement for the quarter for GBCoffee. Assume interest expense of $0, and income tax expense of 21% of income before taxes.

Sales Budget Assumptions Unit Sales Price Percentage of Cash Sale Percentage of Credit sale Expected sales increase 65.00 50% 50% 5% 2015/16 Sales October November December January February Quarter 0,000 bookcases 10,000 bookcases 15,000 bookcases 17,000 bookcases 20,000 bookcases Production Budget Assumptions Direct Materials Budget Assumptions Sales Budget Assumptions Unit Sales Price Percentage of Cash Sale Percentage of Credit sale Expected sales increase 65.00 50% 50% 5% 2015/16 Sales October November December January February Quarter 0,000 bookcases 10,000 bookcases 15,000 bookcases 17,000 bookcases 20,000 bookcases Production Budget Assumptions Direct Materials Budget Assumptions