Company A, a merchandising firm, has budgeted sales for the third quarter of the year: July: .........80,000

Question:

Company A, a merchandising firm, has budgeted sales for the third quarter of the year:

July: .........80,000

August: .........90,000

September: .......70,000

Cost of goods sold equals 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the cost of goods sold for the following month. The inventory on June 30th is less than this ideal since it is only 65,000. The company is now preparing a merchandise budget.

Calculate the following:

a. What are the budgeted purchases for July?

b. What is the desired inventory for September?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...