Budgets monthly cost of goods sold to equal

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Reference no: EM13824336

Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its inventory policy calls for ending inventory in each month to equal 20% of the next month’s budgeted cost of goods sold. All purchases are on credit, and 40% of the purchases in a month is paid for in the same month. Another 40% is paid for during the first month after purchase, and the remaining 20% is paid for in the second month after purchase. The following sales budgets are set: July, $300,000; August, $240,000; September, $270,000; October, $225,000; and November, $215,000.

Reference no: EM13824336

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