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Spelling Company has the following sales projection (in units) for the next six months: Feb: 19000 Mar: 21000 Apr: 17000 May: 24000 Jun: 20000 Jul:

Spelling Company has the following sales projection (in units) for the next six months: Feb: 19000 Mar: 21000 Apr: 17000 May: 24000 Jun: 20000 Jul: 15000 Each unit sells for $50. Spelling has prepared the following sales budget for the quarter of April, May and June:

Sales Budget
April May June Total
Sales in units 17000 24000 20000 61000
Selling price per unit x $50 x $50 x $50
Sales revenue $850000 $1200000 $1000000 $3050000

Spelling's cost of goods sold is 60% of its sales revenue. The company has a policy that it keeps 10% 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. What is the cost of inventory at April 1 (Beginning inventory) What is the budgeted cost of purchases in June? What is the desired cost of inventory at the end of the quarter?

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