Answer:
Budgeted net income=$77,000
Explanation:
Budgeted net income=Total income/Earnings-Deductions/expenditure-income tax
where;
Expenditures;
Selling and administrative expenses=140,000
Factory overheads=200,000
Cost of goods sold=450,000
Capital expenditures=100,000
Total expenditure=Selling and administrative expenses+factory overheads+cost of goods sold+capital expenditures
replacing;
Total expenditure=(140,000+200,000+450,000+100,000)=$ 890,000
Earnings;
Total income/earnings=1,000,000
Income tax=30%of net income
net income=Total income-expenditure=(1,000,000-890,000)=110,000
Income tax=(30/100)×110,000=33,000
Replacing in the expression;
Budgeted net income=Total income/Earnings-Deductions/expenditure-income tax
Budgeted net income=1,000,000-890,000-33,000=77,000
Budgeted net income=$77,000
