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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
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
Budacted unit sales
44,000
62,000
31,000
6Z,000
- Each T-shirt is expected to sell for $16.
- The purchasing manager buys the T-shirts for $6 each.
- The company needs to have enough T-shirts on hand at the end of each quarter to fill 26 percent of the next quarter's sales demand.
- Selling and administrative expenses are budgeted at $82,000 per quarter plus 12 percent of total sales revenue.
Required:
- Determine budgeted sales revenue for each quarter.
- Determine budgeted cost of merchandise purchased for each quarter.
- Determine budgeted cost of good sold for each quarter.
- Determine selling and administrative expense for each quarter.
- Complete the budgeted income statement for each quarter.
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