E Noe of the above QUESTION 21 DDD venture likes to keep $40,000 in additional i
ID: 2799984 • Letter: E
Question
E Noe of the above QUESTION 21 DDD venture likes to keep $40,000 in additional inventory for safety reasons. The cost of goods sold is 70% of sales The inventory at the end of May is $80, 000. The sales forecast for the month of June and July are $150,000 and $200,000, respectively. DDD venture has a policy of keeping sufficient beginning of the month inventory to cover 80% of sale of goods for the month For the month of June, find the firm's purchases? A$72,000 B $41,250 C$85 000 ·D$68.125 E $177.000 Cliek Save and Submit to save and submit.Cliek Save All Ansers to save all asuers 8 9Explanation / Answer
For the month of June,
the begining inventory = $80,000
The ending inventory = 0.80*200,000 = $160,000
Sales forecast for the month of June = $150,000
The firm's purchase = Begining + Sales - Ending inventory
= 80,000 + 150,000 - 160,000
= $70,000
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