Question
The following information pertains to the October operating budget for Flockhart Corporation. Budgeted sales for October $100,000 and November $200,000. Collections for sales are 60%
The following information pertains to the October operating budget for Flockhart Corporation.
Budgeted sales for October $100,000 and November $200,000.
Collections for sales are 60% in the month of sale and 40% the next month.
Gross margin is 30% of sales.
Administrative costs are $10,000 each month.
Beginning accounts receivable (October 1) $20,000.
Beginning inventory (October 1) $14,000.
Beginning accounts payable (October 1) $60,000. (All from inventory purchases.)
Purchases are paid in full the following month.
Desired ending inventory is 20% of next month's cost of goods sold (COGS).
No loans are outstanding on October 1
For October, budgeted cost of goods sold is:
a | $40,000. |
b | $60,000. |
c | $50,000. |
d | $70,000. |
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