Exercise $14-10$ Preparing inventory purchases budgets with different assumptions

Executive officers of Weston Company are wrestling with their budget for the next year. The

following are two different sales estimates provided by two difference sources.

$526$

Chapter $14$

Weston's past experience indicates that cost of goods sold is about $60$ percent of sales reve$-$

nue. The company tries to maintain $10$ percent of the next quarter's expected cost of goods sold

as the current quarter's ending inventory. This year's ending inventory is $$30,000.$ Next year's

ending inventory is budgeted to be $$36,000.$

Required

a$.$ Prepare an inventory purchases budget using the sales manager's estimate.

b$.$ Prepare an inventory purchases budget using the marketing consultant's estimate.