Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce...
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Accounting
Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet 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:
Expected monthly sales for April, May, June, and July are $220,000, $190,000, $310,000, and $90,000, respectively.
Cost of goods sold is 30 percent of expected sales.
CGCs desired ending inventory is 20 percent of the following months cost of goods sold.
Monthly operating expenses are estimated to be:
Salaries: $30,000
Delivery expense: 4 percent of monthly sales
Rent expense on the warehouse: $4,500
Utilities: $800
Insurance: $175
Other expenses: $260
Required:1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.
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WorksheetDifficulty: 2 Medium
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