Arete Company expects to sell 7,500 units for $ 165 each for a total of $ 1,237 comma 500 in January and 2,500 units for $ 185 each for a total of $ 462,500 in February. The company expects cost of goods sold to average 70 % of sales revenue, and the company expects to sell 4,200 units in March for $ 300 each. Arete 's target ending inventory is $ 10,000 plus 40 % of the next month's cost of goods sold. Prepare Arete 's inventory, purchases, and cost of goods sold budget for January and February.

Arete Company Inventory, Purchases, and Cost of Goods Sold Budget Two months Ended January 31 and February 28 January February Cost of goods sold Plus: Desired ending merchandise inventory Total merchandise inventory required Less: Beginning merchandise inventory Budgeted purchases