Please show all calculations for your Sales (in detail plz ) and Cost of Goods S

Question

Please show all calculations for your Sales (in detail plz ) and Cost of Goods Sold figures for each month

SP 22 Santana Rey expects second-quarter 2016 sales of her new line of computer furniture to be the same as the first quarter's sales (reported below) without any changes in strategy. Monthly sales averaged 40 desk units (sales price of $1,250) and 20 chairs (sales price of $500). BUSINESS SOLUTIONS Sogment Income Statemont For Quarter Ended March 31,2016 Salos Cost of goods sold Gross profit Expenses Sales commissions (10%) $180,000 115,000 65,000 Other foxed expenses Total expenses Net income 8,000 9,000 18,000 45,000 20,000 Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (120 desks X $1,250) +(60 chairs X $500)- $150,000+$30,000 $180,000 Cost of goods sold: (120 desks X $750) +(60 chairs XS250) SI0,000-S115,000 Santana Rey believes that sales will increase each month for the next three months (April, 48 desks, 32 chairs; May, 52 desks, 35 chairs; June, 56 desks, 38 chairs) if selling prices are reduced to $1,150 for desks and $450 for chairs, and advertising expenses are increased by 10% and remain at that level for all three months. The products' variable cost will remain at $750 for desks and $250 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,000, and other fixed expenses will remain at $6,000 per month. Required 1. Prepare budgeted income statements for each of the months of April, May, and June that show the expected results from implementing the proposed changes. 2. Use the budgeted income statements from part 1 to recommend whether Santana Rey should implement the proposed changes. Explain.

Explanation / Answer

Hey there !

glad to know you have tried the question yourself first :)

Now let me help you with sales and Cost of goods sold...

have a look at the table below to understand in depth sales and cogs calculation :

I hope the solution is clear to you now and also the working of sales and COGS is clear to you...

Do let me know if you face any other doubts in the question....refer the description in brackets to get to know how a particular amount is coming from...

All the best !! happy studying :)

Amount in $ Ref Particulars April May June a Sale price of Desks (Given)                    1,150                             1,150                      1,150 b Expected Units to be sold - Desks                          48                                   52                            56 c Revenue from Desks ( a x b)                 55,200                          59,800                    64,400 d Sale price of Chairs (Given)                       450                                450                          450 e Expected Units to be sold - Chairs                          32                                   35                            38 f Revenue from Chairs ( d x e)                 14,400                          15,750                    17,100 g Total Revenue ( c+ f)                 69,600                          75,550                    81,500 h Cost of Goods sold : i Desks - Variable Cost ( $ 750 x Expected units to be sold )
=($ 750 x row B)                 36,000                          39,000                    42,000 j Chairs - Variable Cost ( $ 250 x Expected units to be sold )
=($ 750 x row e)                    8,000                             8,750                      9,500 k Total Cost of Goods Sold ( I +j)                 44,000                          47,750                    51,500 Gross Profit (g -k )                 25,600                          27,800                    30,000

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