Budgeting revenue, cost of sales, and gross margin. Madeline Franks, the owner of a small gift and
Question:
Budgeting revenue, cost of sales, and gross margin. Madeline Franks, the owner of a small gift and souvenir shop, expects cash sales of $14,000 for October, $16,300 for November, and $21,100 for December. In addition, she expects credit card sales of $9,800 during October and $11,200 and $15,800, respectively, during November and December. Sales returns and allowances, being historically nonexistent, can be ignored. Credit card com- panies such as VISA and MasterCard charge 4% on credit card sales; thus, the net sales will be 96%. Cost of goods sold traditionally averages 40% of net sales.
REQUIRED Ms. Franks, operating under the business name Whimsy Gifts, asks you to prepare a schedule of budgeted revenue, cost of goods sold, and gross margin for each month of the last quarter.
Also, she requires you to show totals for the quarter.LO1
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 9780135004937
5th Canadian Edition
Authors: Charles T. Horngren, Foster George, Srikand M. Datar, Maureen P. Gowing