Popeil Products, a wholesaler of fishing equipment, budgeted the following sales for the indicated months:

All merchandise is marked up to sell at its invoice cost plus 20%. Target merchandise inventories at the beginning of each month are 25% of that month’s projected cost of goods sold.

1. Compute the budgeted cost of goods sold for the month of June 20X8.

2. Compute the budgeted merchandise purchases for July 20X8.

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August 20X8 $1,910,000 Sales on account Cash sales Total sales June 20X8 $1,850,000 130,000 $1,980,000 July 20x8 $1,920,000 156,000 $2,076,000 274,000 $2,184,000