Gemstone, 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 80% and 40%, respectively. The sales forecast for the next two months for each product category is as follows:

The company€™s policy, which is expected to be achieved at the end of August, is to have ending inventory equal to 120% of the next month€™s cost of goods sold.
Required:
a. Calculate the cost of goods sold for jewelry and watches for September and October.
b. Calculate a purchases budget, in dollars, for each product for the month ofSeptember.

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September October Jewelry Watches $186,000 $90,000 76,500 144,000