Stonehams past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries to maintain 10 percent of the next quarters expected cost of goods sold as the current quarters ending inventory. This years ending inventory is $15,000. Next years ending inventory is budgeted to be $18,000.

Source of Estimate First Quarter Second Quarter Third Quarter Fourth Quarter

Sales manager $225,000 $180,000 $160,000 $270,000

Marketing consultant 300,000 240,000 210,000 350,000