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 $ 720,000 $ 890,000 $ 600,000 $ 500,000 Cost of goods sold 504,000 623,000 420,000 350,000 Gross margin 216,000 267,000 180,000 150,000 Selling and administrative expenses: Selling expense 90,000 109,000 71,000 50,000 Administrative expense* 50,000 68,000 44,000 48,000 Total selling and administrative expenses 140,000 177,000 115,000 98,000 Net operating income $ 76,000 $ 90,000 $ 65,000 $ 52,000 *Includes $32,000 of depreciation each