Ronco 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 25 percent. Target merchandise inventories at the beginning of each month are 30 percent of that month’s projected cost of goods sold. 

1. Compute the budgeted cost of goods sold for the month of June 2012. 

2. Compute the budgeted merchandise purchases for July 2012.

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June 2012 July 2012 August 2012 Sales on account $1,820,000 $1,960,000 $2,100,000 280,000 240,000 260,000 $2,100,000 $2,200,000 $2,360,000 Cash sales Total sales