11. Swenson Inc. sells tire rims. Its sales budget for the nine months ended September 30 follows:.

In the past, cost of goods sold has been 60% of total sales. The director of marketing and the financial vice president agree that each quarters ending inventory should not be below $25,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $200,000 during the fourth quarter. The January 1 inventory was $11,000.

Requirement

Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine month period.

Cash sales, 30% Credits sales, 70% Total sales, 100 Quarter Ended Nine-Month March 31 June 30 September 30 Total 30,000 45,000 37,500 112,500 70,000 105,000 87,500 262,500 100,000 150,000 125,000 375,000