Sorensen Corporation has provided the following information is provided for the March operating budget: Budgeted sales for

Question:

Sorensen Corporation has provided the following information is provided for the March operating budget:

Budgeted sales for March $100,000 and April $200,000

Collections for sales are 60% in the month of sale and 40% the next month.

Gross margin is 30% of sales

Administrative costs are $10,000 each month.

Beginning accounts receivable (March 1) $20,000

Beginning inventory (March 1) $14,000

Beginning accounts payable (March 1) $60,000 (All from inventory purchases)

Purchases are paid in full the following month.

Desired ending inventory is 20% of the next month is cost of goods sold (COGS)

No loans are outstanding on March 1.

For March, what are the budgeted purchases of inventory?

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