Total Pet Shop sells pet food in 20-kilogram bags for ($ 20) per bag, which it buys
Question:
Total Pet Shop sells pet food in 20-kilogram bags for \(\$ 20\) per bag, which it buys from its supplier for \(\$ 12\) per bag. Total estimates that its sales of bags of pet food for the second quarter of the year will be as follows:
Total's policy is to have bags of pet food on hand at the end of each month equal to 15 per cent of the next month's budgeted sales (bags). It expects to have 240 bags of pet food on hand at the end of March and expects to sell 3300 bags in July. Total expects its cost of purchases to be \(\$ 26340\) in March; it pays for its purchases in the following month.
Required:
a Prepare a purchases budget for bags of pet food for the second quarter of this year for Total.
b How many bags of pet food did Total expect to sell in March?
Step by Step Answer:
Accounting Information For Business Decisions
ISBN: 9780170253703
2nd Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley, Marie Kavanagh, Geoff Slaughter, Sharelle Simmons