“Russell Company has the following projected account balances for June 30, 20X5:

“Russell Company has the following projected account balances for June 30, 20X5: Accounts payable $40,000 Sales $800,000Accounts receivable 100,000 Capital stock 400,000Depreciation, factory 24,000 Retained earnings ?Inventories (5/31 & 6/30) 180,000 Cash 56,000Direct materials used 200,000 Equipment, net 240,000Office salaries 80,000 Buildings, net 400,000Insurance, factory 4,000 Utilities, factory 16,000Plant wages 140,000 Selling expenses 60,000Bonds payable 160,000 Maintenance, factory 28,000Required:a. Prepare a budgeted income statement for June 20X5.b. Prepare a budgeted balance sheet as of June 30, 20X5c. How do we use computer-based budgeting in sensitivity analysis?d. Explain how the choice of the type of responsibility center affects behaviour. You should support your discussion by using real world examples.

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