20. s 050 poinh Shamrock Shades openstes in mall kionks thoughout the southweern

Question

20. s 050 poinh Shamrock Shades openstes in mall kionks thoughout the southweern U.S. Shamrock purchanes sunglasses hom bulk discountes and sel the sunglasses in the mal kosks Shanock is n the process of budgeting for the coming year and has projected sales of Salood for January, $860 000 for Febuary rito,00d for March and 57sa,ooo for Apni Shaockdeed month's cost of goods sold. Cost of geods old is expected to be 40 percent of sl Compule the requined puchaes forch month of the qu Hints References Bek& Check m.son 4 cops lock controophion

Explanation / Answer

Calculation of Required Purchases (Amounts in $)

* March Desired Ending Inventory = April Cost of goods sold*30%

= ($750,000*40%)*30% = $90,000

Particulars January February March a) Sales 470,000 550,000 710,000 b) Cost of goods sold (40%*a) 188,000 220,000 284,000 c) Desired Ending Inventory (30% of next month COGS) 66,000 85,200 90,000* d) Beginning Inventory (30%*b) (56,400) (66,000) (85,200) e) Required Purchases (b+c-d) 197,600 239,200 288,800

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