The budget committee of hardesty company collects the

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Reference no: EM13592496

The budget committee of Hardesty Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2012.
Sales for May are expected to be $800,000. Sales in June and July are expected to be 10% higher than the preceding month.

Cost of goods sold is expected to be 75% of sales.

Company policy is to maintain ending merchandise inventory at 20% of the following month's cost of goods sold.

Operating expenses are estimated to be:

Sales salaries $30,000 per month
Advertising 5% of monthly sales
Delivery expense 3% of monthly sales
Sales commissions 4% of monthly sales
Rent expense $5,000 per month
Depreciation $800 per month
Utilities $600 per month
Insurance $500 per month
Budgeted Income Statement
May June
Salls 800,000 880,000

Reference no: EM13592496

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