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Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $280,000 for November, $290,000 for
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $280,000 for November, $290,000 for December, and $290,000 for January. Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 65% of the next month's cost of goods sold. Payment for merchandise Is made In the month following the purchase. Other monthly expenses to be paid in cash are $21,300. Monthly depreciation is $18,500. Ignore taxes. The cost of December merchandise purchases would be: $217,500 $141,375 $93,000 $45,000
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