Grippers sells its rock-climbing shoes worldwide. Grippers expects to sell 4,000 pairs of shoes for $185 each in January and 3,500 pairs of shoes for $220 each in February. All sales are cash only. Grippers expects cost of goods sold to average 65% of sales revenue and the company expects to sell 4,300 pairs of shoes in March for $240 each. Grippers’ target ending inventory is $10,000 plus 50% of the next month’s cost of goods sold.
1. Prepare the sales budget for January and February.
2. Prepare Grippers’ inventory, purchases, and cost of goods sold budget for January and February.