Blue Skies T-shirt Company operates a chain of T-shirt shops in the northeastern United States.
The sales manager has provided a sales forecast for the coming year, along with the following information:

€¢ Each T-shirt is expected to sell for $20.
€¢ The purchasing manager buys the T-shirts for $8 each.
€¢ The company needs to have enough T-shirts on hand at the end of each quarter to fill
30 percent of the next quarter€™s sales demand.
€¢ Selling and administrative expenses are budgeted at $60,000 per quarter plus 15 percent of total sales revenue.

Required:
Prepare the following operating budgets for quarters 1, 2, and 3.
O Sales budget
O Merchandise purchases budget
O Cost of goods sold budget
O Selling and administrative expense budget
O Budgeted incomestatement

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Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted unit sales 50,000 70,000 45,000 65,000