Question

Shamrock Shades operates in mall kiosks throughout the southwestern United States. Shamrock purchases sunglasses from bulk discounters and sells the sunglasses in the mall kiosks. Shamrock is in the process of budgeting for the coming year and has projected sales of $400,000 for January, $480,000 for February, $640,000 for March, and $680,000 for April. Shamrock’s desired ending inventory is 25 percent of the following month’s cost of goods sold. Cost of goods sold is expected to be 40 percent of sales.    

Required:
Compute the required purchases for each month of the first quarter (January through March).

Answer 1

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