Budgeted Income Statement
The data from the different budgets prepared earlier is put together to prepare the budgeted income statement to show whether the profits as reflected in the budgets can be realized or not. The cost of goods sold is prepared from the information in the direct material, direct labor, and factory overhead budgets. The sales‘ budget gives the figure of estimated revenue.
The Budget director can now add information from the selling expense and general and administrative expense budget, to prepare the budgeted income statement.