QUESTION 3

Exercise 7-10A (Algo) Preparing inventory purchases budgets with different assumptions LO 7-3

Executive officers of Thornton Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources.

estimates provided by two difference sources. Thornton's past experience indicates that cost of goods sold is about 65 percent of sales revenue. The company tries to maintain 2 percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. This year's ending inventory is $36,000. Next year's ending inventory is budgeted to be $37,000. 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. Complete this question by entering your answers in the tabs below. Prepare an inventory purchases budget using the sales manager's estimate. (Round your final answers to nearest whole dollar amount.) estmates provided by two dtterence sources. Thornton's past experience indicates that cost of goods sold is about 65 percent of sales revenue. The company tries to maintain 2 percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. This year's ending inventory is $36,000. Next year's ending inventory is budgeted to be $37,000. 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. Complete this question by entering your answers in the tabs below. Prepare an inventory purchases budget using the marketing consultant's estimate. (Round your final answers to nearest whole dollar amount.)