Smith Company expects to sell 5,500 units for $195 each for a total of $1,072,500 in January and 3,000 units for $210 each for a total of $630,000 in February. The company expects cost of goods sold to average 70% of sales revenue, and the company expects to sell 4,000 units in March for $210 each. Smith’s target ending inventory is $14,000 plus 50% of the next month’s cost of goods sold. Prepare Smith’s inventory, purchases, and cost of goods sold budget for January and February.
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