Karmee Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Karmee's sales for the first six months of the coming year are as follows. Estimated Monthly Sales Type of Monthly Sale January $600,000 Cash ales 20% February 650,000 Credit sales 80% March 700,000 April 625,000 May 720,000 June 800,000 Collection Pattem for Credit Sales Month of sale 30% One month following sale 40% Second month following sale 25% Karmee's cost of goods sold average 40 percent of the sales value. Karmee's objective is to maintain a target inventory equal to 30 percent of the next month's sales. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other than cost of goods sold) for Karmee are 10 percent of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July, and October Property taxes are paid twice a year in April and October Annual Fixed Operating costs Advertising $ 720,000 Depreciation 420,000 Insurance 180,000 Property taxes 240,000 Salaries 1,080,000 The amount for cost of goods sold that will appear on Karmee Company's pro forma income statement for the month of February will be: $254.000 $266.000