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A sales budget has been prepared for April. Management wants the amount of ending inventory each month to be equal to 10% of that month's cost of goods sold. Cost of goods sold for April is projected at $60,000. Ending inventory at the end of March is expected to be $12,000. Based on this information, what would the amount of purchases be for April?

Respuesta :

Answer:

$54,000

Explanation:

Given that,

Cost of goods sold for April = $60,000

Ending inventory at the end of March = $12,000

Ending inventory each month = 10% of that month's cost of goods sold

Materials to be purchased for April:

= Cost of goods sold - Beginning Inventory + Ending inventory

=  $60,000 - $12,000 + 10% × $60,000

= $60,000 - $12,000 + $6,000

= $54,000

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