Citrus Girl Company (CGC) purchases quality citrus produce from local growers an
ID: 2538471 • Letter: C
Question
Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Intemet 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 1. Exspected monthly sales for April, May, June, and July are $150,000, $ 120,000, $240,000, , and $60,000, respectively 2. Cost of goods sold is 30 percent of expected sales. 3. CGC's desired ending inventory is 50 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: . Salaries: $36,000 Delivery expense: 6 percent of monthly sales Rent expense on the warehouse: $3,000 Utbilities: $600 . Insurance: $300 . Other expenses: $400 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 Income References eBook & ResourcesExplanation / Answer
1 April May June Budgeted cost of goods sold 45000 36000 72000 Add: Desired ending inventory 18000 36000 9000 Total needs 63000 72000 81000 Less: Beginning inventory 22500 18000 36000 Budgeted cost of purchases 40500 54000 45000 2 Citrus Girl Company Budgeted Income Statement For the month ending 30-Apr 31-May 30-Jun Budgeted sales 150000 120000 240000 Budgeted cost of goods sold 45000 36000 72000 Budgeted Gross Margin 105000 84000 168000 Operating expenses 49300 47500 54700 Budgeted net operating income 55700 36500 113300