Brownsville Novelty Store prepared the following budget information for the mont

Question

Brownsville Novelty Store prepared the following budget information for the month of May: • Sales are budgeted at $360,000. All sales are on account and a provision for bad debts is made for each month at three percent of sales for the month. • Inventory was $84,000 on April 30; an inventory increase of $12,000 is planned for May 31. • All inventory is marked to sell at cost plus 50 percent. • Estimated cash disbursements for selling and administrative expenses for the month are $48,000. • Depreciation for May is projected at $6,000. Brownsville's budgeted cost of goods sold (CGS) in May is:

Explanation / Answer

Brownsville's budgeted cost of goods sold (CGS) in May = 360000/(100+50)*100= $240000

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