Question

Sander Enterprises prepared the following sales​ budget: Month Budgeted Sales March $9,000 April $14,000 May $15,000...

Sander Enterprises prepared the following sales​ budget:

Month

Budgeted Sales

March

$9,000

April

$14,000

May

$15,000

June

$10,000

The expected gross profit rate is 30​% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 30​% of the next​ month's cost of goods sold.

What are the total purchases budgeted for​ May?

A.$9,450

B.$10,500

C.$11,550

D. $ 13650

Homework Answers

Answer #1
Answer:
Particulars March April May June
Sales $ 9,000 $ 14,000 $ 15,000 $ 10,000
Cost of goods sold - 70% $ 6,300 $ 9,800 $ 10,500 $ 7,000
Less: Beginning inventory $10,000 $ 2,940 $ 3,150 $ 2,100
Add: Ending inventory
(30% of next month COGS)
$ 2,940
($9,800 x 30%)
$ 3,150
($ 10,500 x 30%)
$ 2,100
($7,000 x 30%)
Purchase $ 10,010 $ 9,450
Total purchases budgeted for​ May = $ 9,450
Option (A) is Correct - $ 9,450
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