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 45,000 Quarter 2 70,000 Quarter 3 35,000 Quarter 4 70,000 Budgeted Unit Sales .Each T-shirt is expected to sell for $20 .The purchasing manager buys the T-shirts for $8 each. .The company needs to have enough T-shirts on hand at the end of each quarter to fill 30 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $90,000 per quarter plus 18 percent of total sales revenue. Required 1. Determine budgeted sales revenue for each quarter Quarter 1 Quarter 2 Quarter 3 Budgeted Sales Revenue 900,0001,400,000$ 700,000 2. Determine budgeted cost of merchandise purchased for each quarter Quarter 1 Quarter 2 Quarter 3 Budgeted Cost of Merchandise Purchased 276,000 S 252,000S 252,000 3. Determine budgeted cost of good sold for each quarter Quarter 1 Quarter 2 Quarter 3 Budgeted Cost of Goods Sold |$ 360,0001 $ 560.000! $ 280,000 . 4. Determine selling and administrative expenses for each quarter Quarter 1 Quarter 2 Quarter 3 Budgeted SellidAdministrative S 162.000 $ 252 0001 .. 126.0001 5. Complete the budgeted income statement for each quarter. RED CANYON T-SHIRT COMPANY Budgeted Income Statement Quarter 1 Quarter 2 Quarter 3 Budgeted Gross Margin Budgeted Net Operating Income eBook &Resources