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	Quarter 2	Quarter 3	Quarter 4
Budgeted Unit Sales	50,000	80,000	40,000	80,000

Each T-shirt is expected to sell for $25.

The purchasing manager buys the T-shirts for $10 each.

The company needs to have enough T-shirts on hand at the end of each quarter to fill 35 percent of the next quarters sales demand.

Selling and administrative expenses are budgeted at $100,000 per quarter plus 15 percent of total sales revenue.

PAB-6 Preparing Operating Budgets for a Merchandising Firm [LO 8-5, 8-3a. 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 Quarter 2 80,000 Quarter 3Quarter 4 40,00080,000 Budgeted Unit Sales Each T-shirt is expected to sell for $25 The purchasing manager buys the T-shirts for $10 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 35 percent of the next quarter's sales demand Selling and administrative expenses are budgeted at $100,000 per quarter plus 15 percent of total sales revenue Required 1. Determine budgeted sales revenue for each quarter Quarter 1 Quarter 2Quarter 3 Budgeted Sales Revenue 2. Determine budgeted cost of merchandise purchased for each quarter. Quarter 1 Quarter 2 Quarter 3 Budgeted Cost of Merchandise Purchased