PA8-6 Prepaing Operating Budgets for a Merchandising Firm [LO 8-5, 8-3a, f, g, h] Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: Quarter 1 34,000 arter 4 54,000 Budgeted Unit Sales 54,000 27,000 Each T-shirt is expected to sell for $18. The purchasing manager buys the T-shirts for $7 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 28 percent of the next quarter's sales demand Selling and administrative expenses are budgeted at $68,000 per quarter plus 14 percent of total sales revenue