Swenson readers sells e-readers, its sales budget for the nine months ended sept

Question

Swenson readers sells e-readers, its sales budget for the nine months ended september 30 follows:

In the past cost of goods sold has been 75% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $30,000 plus 20% of cost of goods sold for the following quarter. The marketing director expects sales of $220,000 during the fourth quarter. The January 1 inventory was $45,000/

Prepare a cost of goods sold, inventory, and purchases budget for each of the first three quarteres of the year. Compute cost of goods sold for the entire nine-month period.

DATA:

Quarter Ended Quarter Ended Quarter Ended Nine month March 31 Jun 30 Sept 30 Total Cash Sales 30% 30,000 45,000 37,500 112,500 Credit sales 70% 70,000 105,000 87,500 262,500 Total sales 100$ 100,000 150,000 125,000 375,000

Explanation / Answer

Cost of goodsl sold = 75% of total sales

Inventory

Ending inventory $30,000           $30,000                $30,000

20% of following

COGS                   22,500              18,750                33,000

total ending           52,500             $48,750           $63,000

Purchase budget

1 2 3 nine month COGS $75,000 $112,500 $93,750 $281,250

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.