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. 1. Expected monthly sales for April, May, June, and July are $250,000, $220,000, $340,000, and $120,000, respectively. 2. Cost of goods sold is 25 percent of expected sales. 3. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: • Salaries: $33,000 Delivery expense: 7 percent of monthly sales Rent expense on the warehouse: $6,000 Utilities: $1,200 Insurance: $210 Other expenses: $310 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. April 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 Budgeted Gross Margin May Budgeted Net Operating Income May 31 June 30
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. 1. Expected monthly sales for April, May, June, and July are $250,000, $220,000, $340,000, and $120,000, respectively. 2. Cost of goods sold is 25 percent of expected sales. 3. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: • Salaries: $33,000 Delivery expense: 7 percent of monthly sales Rent expense on the warehouse: $6,000 Utilities: $1,200 Insurance: $210 Other expenses: $310 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. April 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 Budgeted Gross Margin May Budgeted Net Operating Income May 31 June 30
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 10EB: Keleher Industries manufactures pet doors and sells them directly to the consumer via their web...
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![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.
1. Expected monthly sales for April, May, June, and July are $250,000, $220,000, $340,000, and $120,000, respectively.
2. Cost of goods sold is 25 percent of expected sales.
3. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold.
4. Monthly operating expenses are estimated to be:
Salaries: $33,000
• Delivery expense: 7 percent of monthly sales
• Rent expense on the warehouse: $6,000
• Utilities: $1,200
• Insurance: $210
• Other expenses: $310
Required:
1. Compute the budgeted cost of purchases for each month in the second quarter.
Total cost of budgeted purchases
Budgeted Gross Margin
April
May
2. Complete the budgeted income statement for each month in the second quarter.
Budgeted Net Operating Income
CITRUS GIRL COMPANY
Budgeted Income Statement
For the Month Ending
April 30
June
May 31
June 30](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcaf1eba9-5e5f-4652-9bd1-56b23f9beaf1%2Ffffd15b7-a671-4ec7-b16e-a58501ae4f15%2Flej1s6l_processed.png&w=3840&q=75)
Transcribed Image Text: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.
1. Expected monthly sales for April, May, June, and July are $250,000, $220,000, $340,000, and $120,000, respectively.
2. Cost of goods sold is 25 percent of expected sales.
3. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold.
4. Monthly operating expenses are estimated to be:
Salaries: $33,000
• Delivery expense: 7 percent of monthly sales
• Rent expense on the warehouse: $6,000
• Utilities: $1,200
• Insurance: $210
• Other expenses: $310
Required:
1. Compute the budgeted cost of purchases for each month in the second quarter.
Total cost of budgeted purchases
Budgeted Gross Margin
April
May
2. Complete the budgeted income statement for each month in the second quarter.
Budgeted Net Operating Income
CITRUS GIRL COMPANY
Budgeted Income Statement
For the Month Ending
April 30
June
May 31
June 30
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