University Logos buys logo-imprinted merchandise and then sells it to university bookstores. Sales are expected to be $2,000,000 in September, $2,160,000 in October, $2,376,000 in November, and $2,500,000 in December. University Logos sets its prices to earn an average 30% gross profit on sales revenue. The company does not want inventory to fall below $400,000 plus 15% of the next month’s cost of goods sold.
Requirement
Prepare an inventory, purchases, and cost of goods sold budget for the months of October and November.