Assume the Freshii Company Is Preparing Its Master Budget for the First

Essay

Assume the Freshii Company is preparing its master budget for the first quarter of its calendar year.The following forecasted data relate to the first quarter:
$\begin{array}{ll}\text { Unit sales: }\\\text { January } & 40,000 \\\text { February } & 60,000 \\\text { March } & 50,000 \\\text { Unit sales price } & \$ 25 \\\text { Cost of goods sold per unit } & \$ 14\\\text { Expenses: }\\\text { Commissions } & 10 \% \text { of sales } \\\text { Rent } & \$ 20,000 / \text { month } \\\text { Advertising } & 15 \% \text { of sales } \\\text { Office salaries } & \$ 75,000 / \text { month } \\\text { Depreciation } & \$ 50,000 / \text { month } \\\text { Interest } & 15 \% \text { annually on a } \$ 250,000 \text { note } \\& \text { payable }\\\text { Tax rate }&40\%\end{array}$ Prepare a budgeted income statement for this first quarter.