The manager of MN Company give you the following data to prepare the required pu
ID: 2563180 • Letter: T
Question
The manager of MN Company give you the following data to prepare the required purchases for the coming three months (January, February and March)
Estimated sales for January
$100,000
?
Sales increase by
5%
for the coming three months
Cost of goods sold (CGS)
60%
of sales
Beginning inventory
$12,000
Ending inventory equal to
20%
of next month CGS
Find the total purchases needed for March.
between $60,000 and $61,000
between $63,000 and $64,000
between $66,000 and $67,000
between $68,000 and $69,000
The manager of MN Company give you the following data to prepare the required purchases for the coming three months (January, February and March)
Estimated sales for January
$100,000
?
Sales increase by
5%
for the coming three months
Cost of goods sold (CGS)
60%
of sales
Beginning inventory
$12,000
Ending inventory equal to
20%
of next month CGS
Explanation / Answer
Calcualtion of Total Purchase for the month of March January February March April Sales $ 1,00,000 $ 1,05,000 $ 1,10,250 $ 1,15,763 COGS is 60% of Sales $ 60,000 $ 63,000 $ 66,150 $ 69,458 COGS = Opening Stock + Purchase - Closing Stock Purchase = COGS + Closing Stock - Opening Stock $ 60,600 $ 63,630 $ 66,812 Opening Stock $ 12,000 $ 12,600 $ 13,230 Closing Stock $ 12,600 $ 13,230 $ 13,892 Purchase is required for the month of March = $ 66,812 Answer = Option 3 = between $66,000 and $67,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.