Garden Sales, Incorporated, usually has to borrow money during the second quarter to support peak sales of lawn care equipment during May. It gathered the following information to prepare a cash budget for the quarter: Budgeted monthly absorption costing income statements for AprilJuly are: April May June July Sales $ 780,000 $ 940,000 $ 640,000 $ 550,000 Cost of goods sold 546,000 658,000 448,000 385,000 Gross margin 234,000 282,000 192,000 165,000 Selling and administrative expenses: Selling expense 94,000 113,000 75,000 55,000 Administrative expense* 52,000 71,200 46,400 52,000 Total selling and administrative expenses 146,000 184,200 121,400 107,000 Net operating income $ 88,000 $ 97,800 $ 70,600 $ 58,000 *Includes $36,000 of depreciation eac