Stuart Corporation recorded sales of $200,000 during March. Management expects sales to increase 5% in April, another 4% in May, and another 10% in June. Cost of goods sold is expected to be 80% of sales. What is the budgeted gross profit for June?

Question

Quizplus · Accepted Answer

To find the budgeted gross profit for June, we need to calculate the budgeted sales, budgeted cost of goods sold, and then subtract the two.

Budgeted sales for April: $200,000 x 1.05 = $210,000 
Budgeted sales for May: $210,000 x 1.04 = $218,400 
Budgeted sales for June: $218,400 x 1.10 = $240,240

Budgeted cost of goods sold for June: $240,240 x 0.80 = $192,192

Budgeted gross profit for June: $240,240 - $192,192 = $48,048

Stuart Corporation Recorded Sales of $200,000 During March