Pargo Wholesalers is preparing its merchandise purchases budget. Budgeted sales are $400,000 for April and $475,000 for

Question:

Pargo Wholesalers is preparing its merchandise purchases budget. Budgeted sales are $400,000 for April and $475,000 for May. Cost of goods sold is expected to be 60% of sales. The company’s desired ending inventory is 20% of the following month’s cost of goods sold. Compute the required purchases for April.

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 =...