Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern

Question

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:

ANSWER ALL OF THE FOLLOWING. Show Work

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 expenses for each quarter.

Complete the budgeted income statement for each quarter.

Quarter 1 30,000 Quarter 2 50,000 Quarter 3 25,000 Quarter 4 50,000 Budgeted Unit Sales

Explanation / Answer

Note: Desired ending inventory for quarter 4 and hence further calculations cannot be completed since the budgeted unit sales for the next quarter are not provided.

Sales Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted sales in units 30000 50000 25000 50000 Unit selling price $             22 $             22 $             22 $             22 Budgeted Sales Revenue $ 660000 1100000 550000 1100000 Budgeted Cost of Merchandise Purchased Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted sales in units 30000 50000 25000 50000 Desired ending inventory at 32% of next quarter's sales 16000 8000 16000 ? Total requirements 46000 58000 41000 ? Less beginning inventory 9600 16000 8000 16000 Budgeted purchases (units) 36400 42000 33000 ? Cost per unit $               9 $               9 $               9 $               9 Budgeted Cost of merchandise purchased $ 327600 378000 297000 ?

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