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Brownsville Novelty Store prepared the following budget information for the month of May: Sales are budgeted at $402,000. All sales are on account and a

Brownsville Novelty Store prepared the following budget information for the month of May:

  • Sales are budgeted at $402,000. All sales are on account and a provision for bad debts is made for each month at three percent of sales for the month.
  • Inventory was $100,000 on April 30; an inventory increase of $16,000 is planned for May 31.
  • All inventory is marked to sell at cost plus 50 percent.
  • Estimated cash disbursements for selling and administrative expenses for the month are $64,000.
  • Depreciation for May is projected at $7,600.

Brownsville's budgeted cost of goods sold (CGS) in May is:

Multiple Choice

  • $134,000.

  • $201,000.

  • $238,600.

  • $284,000.

  • $268,000.

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