Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for April-July are: July April 455,000 195,000 June Sales $650,000 $ 1,150,000 $ 610,000 $ 520,000 805,000 427,000 364,000 Cost of goods sold Gross margin Selling and administrative expenses: 345,000 183,000 156,000 Selling expense Administrative expense* 121,000 50,500 110,000 68,800 72,000 44,600 52,000 49,000 Total selling and administrative expenses 171,500 178,800 116,600 101,000 Net operating income $ 23,500 $ 166,200 $S 66,400 $ 55,000 "Includes $33,000 of depreciation each month