Red Canyon T-shirt Company operates a chain of T-shirt shops in the souttwestern United States. The sales manager has provided a sales forecast for the coming year, along with the followingg information: Quarter 1 44.000 Quarter 2 68,000 Quater 3 34.000 Quarter 4 68,000 Budgeted Unit Sales Each T-shirt is expected to sel for $19. 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 fil 29 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at 588,000 per quarter plus 16 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. Quarter 1 Quarter 2 Quarter 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 3. Determine budgeted cost of good sold for each quarter. Quarter 1 Quarter 2 Quarter 3 Budgeted Cost of Goods Sold 4. Determine selling and administrative expenses for each quarter. Quarter 1 Quarter 2 Quarter 3 Budgeted Selling and Administrative Expenses 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 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 44.000 Quarter 2 68.000 Quarter 3 34,000 Quarter 4 Budgeted Unit Sales 68.000 Each T-shirt is expected to sell for $19. 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 f 29 percent of the next quarter's sales demand. Seling and administrative expenses are budgeted at S88,000 per quarter plus 16 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. Quarter1 Quarter 2 Quarter 3 Budgeled Sales Revenue 2. Determine budgeted cost of merchandise purchased for each quarter Quarter 1 Quarter a Quarter 3 Budgeted Cost of Merchandise Purchased 3. Determine budgeted cost of good sold for each quarter. Quarter 1 Quarter 2 Quarter 3 Budgeted Cost of Goods Sold 4. Determine selling and administrative expenses for each quarter. Quarter 1 Quarter 2 Quarter 3 Budgeted Selling and Administrative Expenses 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
