Answer:
Oliver Company
Budgeted Income Statement For the Coming Year
Sales ($10.80 * 160,000) $1,728,000
Cost of goods sold ($6.30 * 160,000) <u>($1,008,000)</u>
Gross margin(Sales - COGS) $720,000
Less: Variable selling and administrative expenses ($176,000)
($1.10 * 160,000)
Less: Fixed selling and administrative expenses <u>($423,000)</u>
Operating income $121,000
Less: Income taxes (35% * 121,000) <u>($42,350)</u>
Net income <u>$78,650</u>
