Speling Company has the following sales projection (in units) for the nex sx mon

Question

Speling Company has the following sales projection (in units) for the nex sx monehs Feb: 16000 Mar 19000 Apr 14000 May: 21000 Jun: 17000 Jul: 12000 Each unit sells for S40 Speling has prepared the folowing sales budget for the quater of Apri May and June Sales Budget May 17000 otal 2000 Sales in price per unit revenue 4000 $40 $560000 x $40 $840000 680000 $2080000 speling's cost of goods sold is 80% of ns sales revenue. The company has a poicy mat it keeps 10% of next mo es budget dast af gods sold as onding metry. The co Oany adea ty the budgeted amout of inventory on hand at April Prepare a purchases budget on paper or, PREFERABLY, in Excel for the quarter of Agnil, May and June Iif you build your schedule using formulas in excel, multipie attempts will be much faster ) What is the cost of inventory at April 1 (Beginning inventory What is the budgeted cost of purchases in May What is the desired cost of inventory at the end of the quarter?

Explanation / Answer

production budget' April may june total july sales 560,000 840,000 680,000 2,080,000 480000 percntage of COGS 80% 80% 80% 80% 80% Cost of goods sold 448000 672000 544000 1664000 384000 ending inventory 10% of cogs 67,200 54,400 38,400 38,400 total needs 515200 726400 582400 1702400 less:opening inventory -44,800 -67200 -54,400 -44800 purchase required 470400 659200 528000 1657600 cost of inventory at April 1(beginninf invnetory) 44,800 bugeted cost of purchase for may 659,200 desired cost of inventory at the end of quarter 38,400

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