Inventory purchases budget

Reference no: EM1310674

Executive officers of Shavez Company are wrestling with their budget for next year. The following are two different sales estimates provided by two different sources.

Sales manager

1st quarter 380,000,

2nd quarter 310,000;

3rd quarter 280,000

4th quarter 480,000

Marketing consultant

1st quarter 520,000;

2nd quarter 460,000;

3rd quarter 410,000 and

4th quarter650, 000

Shavezs past experience indicates that cost of goods sold is about 60percent of sales revenue. The company tries to maintain 10% of the next of the next quarters expected cost of goods sold as the current quarters ending inventory. This years ending inventory. This years ending inventory is 29,000.Next years ending inventory is budgeted to be $30,000.

(A) Prepare an inventory purchase budget using the sales manager's estimate.

(B) Prepare an inventory purchases budget using the marketing consultants estimate.

Reference no: EM1310674

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