The Argyle Company forecasts sales of $50,000 in January, $60,000 in February, $70,000 in March, and $75,000 in April. The inventory balance as of January 1 is $12,000. Cost of goods sold is budgeted at 40% of sales revenue. Argyle wants to have inventory levels at the end of each month equal to 60% of the cost of goods sold for the following month, plus a "safety cushion" of $1,000. 

How much should be budgeted for inventory purchases in January?

Answer rating: 100% (QA)

First we need to calculate the cost of goods sold for each month Jan... View the full answer