Question

# Mountaineer Company expects to sell 8,500 units for \$165 each for a total of \$ 1,402,500...

Mountaineer Company expects to sell 8,500 units for \$165 each for a total of \$ 1,402,500 in January and 2,800 units for \$ 185 each for a total of \$ 518,000 in February. The company expects cost of goods sold to average 70?% of sales? revenue, and the company expects to sell 4,300 units in March for \$280 each. Mountaineer?'s target ending inventory is \$ 16,000 plus 40?% of the next? month's cost of goods sold. Prepare Mountaineer?'s ?inventory, purchases, and cost of goods sold budget for January and February.

costs of goods sold

plus: desired ending merchandise inventory

total merchandise inventory required

less:begining merchandise inventory

budgeted purchases

 Mountaineer Company Inventory, Purchases, and Cost of Goods Sold Budget Two months Ended January 31 and February 28 January February Marach Sales in units 8,500 2,800 4,300 Sales price \$165 \$185 \$280 Sales in dollars \$1,402,500 \$518,000 \$1,204,000 Percentage of cost of goods sold 70% 70% 70% Cost of goods sold \$981,750 \$362,600 \$842,800 Plus: Desired ending merchandise inventory \$161,040 \$353,120 Total merchandise inventory required \$1,142,790 \$715,720 Less: Beginning merchandise inventory \$408,700 \$161,040 Budgeted purchases \$734,090 \$554,680

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