Reference no: EM132562135

The sales budget of KK Garment Industries for the nine months ended 30-09-2019 follows:

              1st Quarter             2nd Quarter                  3rd Quarter 9 Months

               Jan-Mar                  Apr-Jun                    Jul-Sep                  Total

Cash Sales       ?                            ?                          ?                          ?                   ?

Credit Sales       ?                        84,000                    112,000              119,000         315,000

                         100%             120,000                    160,000                  170,000              450,000

Additional Information:

In the past, cost of goods has been 60% of credit sales. The desired ending inventory should not go below 25,000 plus 10% of the cost of goods sold for the forgoing quarter. The company actual sales were Rs.100, 000 during the fourth quarter of the forgoing year. The January 01 inventory was Rs. 30,000

Required:

Question a) Complete the above table and prepare the Purchase Budget for the first three quarters of the year.

Question b) What is the starting point of preparing a production budget