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How do you compute the desired beginning inventory and the budgeted purchases? Norton Company prepared the following sales budget: Month Budgeted Sales March $200,000 April

How do you compute the desired beginning inventory and the budgeted purchases?

Norton Company prepared the following sales budget:

Month

Budgeted Sales

March

$200,000

April

$180,000

May

$220,000

June

$260,000

Cost of goods sold is budgeted at 60% of sales, and the inventory at the end of February was $36,000. Desired inventory levels at the end of each month are 30% of

the next month's cost of goods sold.

  1. What is the desired beginning inventory on June 1?

A) $36,000 B) $39,600 C) $43,200 D) $46,800

  1. How much are the budgeted purchases for the month of April?

A) $157,200 B) $123,900 C) $134,400 D) $99,700

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