. The Jones Company estimates that its manufacturing costs for 2020 will be as follows:
Direct Materials purchases $295,000
Direct Labor $2.25 per unit
Variable Overhead $.75 per unit
Variable selling costs $.10 per unit
Fixed overhead $100,000 per year
Fixed selling costs 30,000 per year
Administrative costs 80,000 per year
Sales 101,000 units at
$9.00 per unit
Additionally, the company expects that the various inventories will have these amounts:
Finished Goods Inventory, Jan. 1 $75,000 (10,000 units)
Direct Materials Inventory, Jan. 1 $20,000
Finished Goods Inventory, Dec. 31 9,000 units
Direct Materials Inventory, Dec.31 $15,000
There is no beginning or ending Work in Process inventory.
For budgeting purposes, the company assumes a combined state and federal income tax
rate of 40%.
Prepare a budgeted income statement for the coming year.