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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.
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