Thomas Corporation recorded sales of $150,000 during March. Management expects sales to increase 3% in April, another 25% in May, and another 8% in June. Cost of goods sold is expected to be 60% of sales. What is the budgeted gross profit for June?

Question

Quizplus · Accepted Answer

First, calculate the sales for each month, then determine the cost of goods sold (COGS) for June, and finally calculate the gross profit for June. March sales are $150,000. April sales increase by 3%: $150,000 * 1.03 = $154,500. May sales increase by 25% from April: $154,500 * 1.25 = $193,125. June sales increase by 8% from May: $193,125 * 1.08 = $208,575. COGS for June (60% of June sales): $208,575 * 0.60 = $125,145. Gross profit for June = June sales - COGS = $208,575 - $125,145 = $83,430.

Thomas Corporation Recorded Sales of $150,000 During March