Well, it's been quite a long journey in this example of preparing the operating budget and we're almost done. In this episode, we will complete our work. We have just something else to do before we will enjoy reaching this goal. So, this is preparing operating budget results. First of all, we have schedule seven, which is cost of goods sold. Now here, this table is prepared on the following basis, we take all the previous schedules that are relevant to this calculation, here I put them specifically, and then we put the corresponding dollar contributions. So, we have, for cost of goods sold we must calculate the beginning finished goods inventory, direct materials used, direct manufacturing labor, manufacturing overhead, then all that adds to the cost of goods manufactured, then we arrive at cost of goods available for sale is this plus cost of goods manufactured. We subtract the end-finished goods inventory and that leads us to cost of goods sold. Now, where do we take them? Beginning FGI comes from panel D3, just put the number. Then direct materials used, this is schedule 3A, 1,053. Direct manufacturing labor, schedule 4, 774, manufacturing overhead, we've just seen it, 1,032, and that gives us the cost of goods manufactured which is 2,859,200. Now, so this is what we manufactured, but for sale there is available, not only this, but also beginning finished goods inventory. Again, we use FIFO, so the total cost of goods available for sale is 2,916,800. And from that, we have to subtract the cost of unfinished goods inventory. Now, we understand why we were torturing ourselves with these calculations in the schedule 6B. That was the number on the previous page of flip chart, 405,600. And that gives us a very important component, cost of goods sold which is 2,511,200. Again, so far so good. Like I said, we need just one more supporting schedule and this is schedule eight, because now we go to other non-production costs. Again, here, we have copied everything from schedule D6. And there was a variable part and fixed part. So we see R&D, marketing, distribution, customer service, and G and A, and that's broken down in the variable and fixed part. The important piece for us is not only $920,000, the total, but also this part of 500,000. Because there was one more assumption made up there that we haven't used so far and we will not actually be using that for the income statement, but it may be used for some other components of the master budget. This is the rate per revenue dollar. Because the assumption went that variable non-production costs, are variable with respect to revenue dollars. So, you take this number 500,000, you divide that by the total revenue of 3,840,000 and you get the rate of 13 cents per each dollar of revenues. So, if we would have had another amount of revenues and we would be charged with the goal of finding the proper variable non-production costs, we would have taken the new amount and we would have multiplied that by 13 cents and that would have given us the number instead of this. So, finally, again, my congratulations. I flip over the page and we arrive at the budget of the income statement. Again, this table is structured in a very easy way. We have schedule, and then dollar amounts and positions here. Revenue comes from schedule one, 3,840,000, well recognized thing. Cost of goods sold, again, from this very episode schedule seven, 2,511,600. That gives us gross margin of 1,328,400. Now, from this gross margin, we have to subtract operating costs. And here, I will flip back for a moment. So, we go back to the schedule eight, but that was more detailed, that was broken down by variable and fixed. Now, we lump them together. R&D, marketing, distribution, customer service, and G&A. So, we add the corresponding numbers and we say that R&D is 140, marketing 210, distribution 105, customer service 63, and then G&A 402. So, clearly, the sum is $920,000. All of them come from schedule eight. So, we have gross margin, we subtract all costs, and then we arrive at the operating income of 408,400. Well, congratulations. Now, let me briefly remind you of what we have done here. Because that was half of this week, the core part of this week. So, the important thing is to keep in mind that we started out with some important inputs and assumptions. And then, we made some supporting schedules and these schedules were sort of built up one on the other. So, we could hardly skip one and jump over to the next one because we would use not only the information from the data but also the information from the schedules, by that time we have come up with. And that step by step in a straightforward but sort of cumbersome way, that has led us to this number. Now, you can imagine that this is just the interim stop in preparation of the master budget. We would have dealt with some other and many schedules that are not so easy to follow compared with these ones. So, the preparation of the master budget is a much more challenging task, but the methodology of that is the same. Now, we do not pursue the goal of becoming the experts in preparation of budgets. So, we now see how budgets contribute to the final bottom line numbers. And at the very end of this week, and at the end of this course, we will study the idea of responsibility accounting, how budgets contribute to the promotion of efficiency at a company, or in a project, in its planning, implementation, and the bottom line.