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. Quarter 1 Quarter 2 Quarter 3 Quarter 4 33,000 6,000 Budgeted Unit Sales 13.000 66,000 .Each T-shirt is expected to sell for $18. The purchasing manager buys the T-shirts for $7 each . The company needs to have enough T-shirts on hand at the end of each quarter to fill 28 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $86,000 per quarter plus 15 percent of total sales revenue Required: 1. Determine budgeted sales revenue tor each quarter. Quarter 1 Quarter 2 Quarter 3 Budgeted Sales Revenue 2. Determine budgeted cost of merchandise purchased for each quarter Quarter 1 Quarter 2 Quarter 3 Budgeted Cost of Merchandise Purchased

Explanation / Answer

1)Budgeted sales revenue

2)Budegeted cost of merchendise purchase

3)Budegeted cost of goods sold

?cost of goods sold (units)=opening inventory+purchases-closeeing inventory

? i.e=sales units given

4)Selling&adminstrative overhead budget

5)Budgeted income statement of RED CANYAON T-SHIRT COMPANY

Quarter1 Querter2 Querter3 Budgeted sales units 43000 66000 33000 selling price per T-shirt 18$ 18$ 18$ Budgeted sales revenue 7,74,000$ 11,88,000$ 5,94,000$

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