Executive officers of Cary Company are wrestling with their budget for the next year. The following are
Question:
Executive officers of Cary Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources.
Cary’s past experience indicates that cost of goods sold is about 70 percent of sales revenue. The company tries to maintain 10 percent of the next quarter’s expected cost of goods sold as the current quarter’s ending inventory. This year’s ending inventory is \($30,000\) . Next year’s ending inventory is budgeted to be \($32,000\) .
Required
a. Prepare an inventory purchases budget using the sales manager’s estimate.
b. Prepare an inventory purchases budget using the marketing consultant’s estimate.
Step by Step Answer:
Survey Of Accounting
ISBN: 9780077503956
1st Edition
Authors: Thomas Edmonds, Philip Olds, Frances McNair, Bor-Yi Tsay