TNR Corporation Is Preparing Its Budgeted Income Statement for the Month

Multiple Choice

TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operating costs plus cost of goods sold equals 40% of net income. Return on sales (net income / sales) is anticipated to be 50%. TNR does not have any nonoperating items on its income statement.
TNR's budgeted gross margin is:

A) $3,600
B) $15,600
C) $14,400
D) None of the above