The budget committee of Litwin Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2014. 1. es for May are expected to be $800,000. Sales in June and July are expected to be 5% higher than the preceding month. 2. Cost of goods sold is expected to be 75% of sales. 3. Company policy is to maintain ending merchandise inventory at 15% of the following month's cost of goods sold 4. Operating expenses are estimated to be: Sales salaries $30,000 per month Advertising 6% of monthly sales 3% of monthly sales Delivery expense Sales commissions 5% of monthly sales Rent expense $5,000 per month Depreciation $800 per month Utilities $600 per month $500 per month Insurance 5. Income taxes are estimated to be 30% of income from operations