Citrus Girl Company (CGC) purchases quality citrus across the United States. To
ID: 2511613 • Letter: C
Question
Citrus Girl Company (CGC) purchases quality citrus across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets CGC has the following information for the second quarter of the year roduce from local growers and sells the produce via the Internet 1. Expected monthly sales for Apri, May, June, and July are $130,000, $100,000, $220,000, and $4 2. Cost of goods sold is 20 percent of expected sales 3. CGC's desired ending inventory is 30 percent of the following month's cost of goods sold 4 Monthly operating expenses are estimated to be: 0.000, respectively . Salaries: $38,000 Delivery expense: 8 percent of monthly sales Rent expense on the warehouse: $2,000 . Utilities: $400 . Insurance: $180 Other expenses: $280 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter April May June Total cost of budgeted purchases 2. Complete the budgeted income statement for each month in the second quarter. CITRUS GIRL COMPANY Budgeted Income Statement For the Month Ending April 30 May 31 June 30 Budgeted Gross Margin Budgeted Net Operating IncomeExplanation / Answer
RAW MATERIAL PURCHASE BUDGET APRIL MAY JUNE QUARTER JULY Budgeted Sales in $ 130,000 100,000 220,000 450,000 40,000 % of Cost of Goods sold to sales 20% 20% 20% 20% 20% Cost f Goods sold 26,000 20,000 44,000 90,000 8,000 Add: desired ending Inventory 6,000 13,200 2,400 2,400 Total Needs 32,000 33,200 46,400 92,400 Less: Desired beginning Inventory 7,800.00 6,000.00 13,200.00 7,800.00 Budgeted Purchase in $ 24,200 27,200 33,200 84,600 BUDGETED INCOME STATEMENT APRIL MAY JUNE Budgeted sales 130000 100000 220000 Less: Cost og Goods sold 26000 20000 44000 Budgeted Gross Margin 104000 80000 176000 Less: Operating expense Salaries 38000 38000 38000 Delivery expense 10400 8000 17600 Rent expense 2000 2000 2000 Utilities 400 400 400 Insurance 180 180 180 Other expense 280 280 280 Budgeted Net operating income 52740 31140 117540