Apple Corporation provided the following information related to its inventory sa

Question

Apple Corporation provided the following information related to its inventory sales and purchases for December Year 1 and the first quarter of Year 2:

Desired ending inventory levels are 27% of the following month's projected cost of goods sold. Budgeted purchases of inventory in February Year 2 would be:

A. $86,400.

B. $105,120.

C. $65,100.

D. $78,900.

Dec. Year 1 Jan. Year 2 Feb. Year 2 Mar. Year 2 (Actual) (Budgeted) (Budgeted) (Budgeted) Cost of goods sold $ 37,000 $ 67,000 $ 87,000 $ 57,000

Explanation / Answer

Correct Answer (D) $78900

Budgeted purchases of inventory in February Year 2

Desired Closing Inventory($57000*27%)

$    15,390.00

Add: Cost of Goods Sold

$    87,000.00

$ 102,390.00

Less: Opening Inventory(Jan closing Inventory )

$    23,490.00

Budgeted Purchases in February

$    78,900.00

Jan Closing inventory ($87000*27%)

$    23,490.00

Correct Answer (D) $78900

Calculations

Budgeted purchases of inventory in February Year 2

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.