Citrus girl company cgc purchases quality citrus produce

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Reference no: EM13579826

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.

2. Find budgeted gross margin

Reference no: EM13579826

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