The sales budget for the year shows 50,000 units and total sales of $2,000,000. The total unit cost of making one unit of sales is $24. Selling and administrative expenses are expected to be $300,000. Income taxes are estimated to be $150,000. Prepare a budgeted income statement for the year ending
300,000 Income before income taxes?? 500,000 Income tax expense? ?150,000 Net income$? Explain the similarities and differences between standards and budgets. Standards and budgets are similar in that both are predetermined costs and both contribute significantly to management planning and control. The two terms differ in that a standard is a unit amount and a budget is a total amount. (b) Contrast the accounting for standards and budgets. There are important accounting differences between budgets and standards. Except in the application of manufacturing overhead to jobs and processes, budget data are not journalized in cost accounting systems.