Dave, the owner of Dave's Doughnuts, has prepared an operating budget that shows the following data for the quarter ended March 31:
The sales price of each doughnut is $4.75, and the cost to produce each doughnut is $3.10. The company's tax rate is 30%. Based on this information, what amount would Dave's budgeted income statement show for net income? Round all calculations to two decimal places.
A) $1,670.37
B) $2,386.25
C) $2,886.25
D) $7,136.25

Question

Dave, the owner of Dave's Doughnuts, has prepared an operating budget that shows the following data for the quarter ended March 31:
 The sales price of each doughnut is $4.75, and the cost to produce each doughnut is $3.10. The company's tax rate is 30%. Based on this information, what amount would Dave's budgeted income statement show for net income? Round all calculations to two decimal places.
A) $1,670.37 
B) $2,386.25 
C) $2,886.25 
D) $7,136.25

Quizplus · Accepted Answer

A total of 4,325 doughnuts are projected to be sold during the quarter ending March 31. The net income would be determined by preparing a budgeted income statement as follows:
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Dave, the Owner of Dave's Doughnuts, Has Prepared an Operating