Precious Stones Ltd. is a retail jeweler. Most of the firm?s business is in jewelry and watches.

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Precious Stones Ltd. is a retail jeweler. Most of the firm?s business is in jewelry and watches. The firm?s average gross profit ratio for jewelry and watches is 70% and 40%, respectively. The sales forecast for the next two months for each product category is as follows:

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The company?s policy, which is expected to be achieved at the end of April, is to have ending inventory equal to 150% of the next month?s cost of goods sold.

Required:

a. Calculate the cost of goods sold for jewelry and watches for May and June.

b. Calculate a purchases budget, in dollars, for each product for the month of May.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Accounting What the Numbers Mean

ISBN: 978-1260565492

12th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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