Question

Leno sells tire rims. Its sales budget for the nine months ended September 30 follows:
In the past, cost of goods sold has been 60% of total sales. The director of marketing and the financial vice president agree that each quarter’s ending inventory should not be below $20,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $220,000 during the fourth quarter. The January 1 inventory was $19,000.
Requirement
Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine-month period


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  • CreatedApril 30, 2015
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