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 50,000 80,000 40,000 80,000 Budgeted unit sales • Each T-shirt is expected to sell for $25. 35 ⚫ The purchasing manager buys the T-shirts for $10 each. • The company needs to have enough T-shirts on hand at the end of each quarter to fill 35 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $100,000 per quarter plus 15 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expense for each quarter. 5. Complete the budgeted income statement for each quarter. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the budgeted income statement for each quarter. Budgeted Sales Revenue Budgeted Cost of Goods Sold RED CANYON T-SHIRT COMPANY Budgeted Income Statement Quarter 1 Quarter 2 Quarter 3 $ 1,250,000 780,000 Budgeted Gross Margin Budgeted Sales Returns and Allowances Budgeted Contribution Margin Budgeted Net Operating Income
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 50,000 80,000 40,000 80,000 Budgeted unit sales • Each T-shirt is expected to sell for $25. 35 ⚫ The purchasing manager buys the T-shirts for $10 each. • The company needs to have enough T-shirts on hand at the end of each quarter to fill 35 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $100,000 per quarter plus 15 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expense for each quarter. 5. Complete the budgeted income statement for each quarter. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the budgeted income statement for each quarter. Budgeted Sales Revenue Budgeted Cost of Goods Sold RED CANYON T-SHIRT COMPANY Budgeted Income Statement Quarter 1 Quarter 2 Quarter 3 $ 1,250,000 780,000 Budgeted Gross Margin Budgeted Sales Returns and Allowances Budgeted Contribution Margin Budgeted Net Operating Income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text: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
50,000 80,000
40,000
80,000
Budgeted unit sales
• Each T-shirt is expected to sell for $25.
35
⚫ The purchasing manager buys the T-shirts for $10 each.
• The company needs to have enough T-shirts on hand at the end of each quarter to
fill 35 percent of the next quarter's sales demand.
Selling and administrative expenses are budgeted at $100,000 per quarter plus 15
percent of total sales revenue.
Required:
1. Determine budgeted sales revenue for each quarter.
2. Determine budgeted cost of merchandise purchased for each quarter.
3. Determine budgeted cost of good sold for each quarter.
4. Determine selling and administrative expense for each quarter.
5. Complete the budgeted income statement for each quarter.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Required 4
Required 5
Complete the budgeted income statement for each quarter.
Budgeted Sales Revenue
Budgeted Cost of Goods Sold
RED CANYON T-SHIRT COMPANY
Budgeted Income Statement
Quarter 1
Quarter 2
Quarter 3
$
1,250,000
780,000
Budgeted Gross Margin
Budgeted Sales Returns and Allowances
Budgeted Contribution Margin
Budgeted Net Operating Income
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