Question

Scannell Readers sells eReaders. 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 $ 10,000 plus 10% of cost of goods sold for the following quarter. The marketing director ­expects sales of $ 230,000 during the fourth quarter. The January 1 inventory was $ 18,000.

Requirement
Prepare a cost of goods sold, inventory, and purchases budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine- monthperiod.


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  • CreatedAugust 27, 2014
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