Spelling Company has the following sales projection (in units) for the next six months: Feb: 11000 Mar: 12000 Apr: 10000 May: 13500 Jun: 11500 Jul: 9000 Each unit sells for $20. Spelling has prepared the following sales budget for the quarter of April, May and June:

Sales Budget
	April	May	June	Total
Sales in units	10000	13500	11500	35000
Selling price per unit	x $20	x $20	x $20
Sales revenue	$200000	$270000	$230000	$700000

Spelling's cost of goods sold is 60% of its sales revenue. The company has a policy that it keeps 20% of next months budgeted cost of goods sold as ending inventory. The company had exactly the budgeted amount of inventory on hand at April 1. Prepare a purchases budget on paper or, PREFERABLY, in Excel for the quarter of April, May and June. (If you build your schedule using formulas in excel, multiple attempts will be much faster.) What is the cost of inventory at April 1 (Beginning inventory) Hint: This is the same as budgeted inventory at 3/31. According to the rule that is April COGS x 20%. What is the budgeted cost of purchases in June? What is the desired cost of inventory at the end of the quarter? Hint: According to the rule that is July COGS x 20%.