Question
Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs
Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year:
Expected monthly sales for April, May, June, and July are $320,000, $290,000, $410,000, and $190,000, respectively.
Cost of goods sold is 50 percent of expected sales.
CGCs desired ending inventory is 45 percent of the following months cost of goods sold.
Monthly operating expenses are estimated to be:
Salaries: $40,000
Delivery expense: 4 percent of monthly sales
Rent expense on the warehouse: $9,500
Utilities: $1,900
Insurance: $270
Other expenses: $370
Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started