Compute the budgeted merchandise purchases for october

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Question - In September 2019, the management of Rye Company assembles the following data in preparation of budgeted merchandise purchases for the months of October and November.

1. Expected Sales

October $1,500,000

November 2,100,000

December 2,700,000

2. Cost of goods sold is expected to be 70% of sales.

3. Desired ending merchandise inventory is 20% of the next month's cost of goods sold.

4. The beginning inventory at October 1 will be the desired amount.

Required - Compute the budgeted merchandise purchases for October and November. Use a columnar format with separate columns for each month.

Reference no: EM133170210

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