Preparing inventory purchases budgets with different assumptions Executive officers of Grant Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources.

L.O. 4 Source of Estimate First Quarter Second Quarter Third Quarter Fourth Quarter Sales manager $500,000 $400,000 $360,000 $640,000 Marketing consultant 550,000 480,000 400,000 600,000 Grant’s past experience indicates that cost of goods sold is about 70 percent of sales revenue. The company tries to maintain 10 percent of the next quarter’s expected cost of goods sold as the current quarter’s ending inventory. This year’s ending inventory is $30,000. Next year’s ending inventory is budgeted to be $32,000.
Required

a. Prepare an inventory purchases budget using the sales manager’s estimate.

b. Prepare an inventory purchases budget using the marketing consultant’s estimate.