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Question - Company A, a merchandising firm, has budgeted sales for the third quarter of the year:
July: 80,000
August: 90,000
September:70,000
Cost of goods sold equals 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the cost of goods sold for the following month. The inventory on June 30th is less than this ideal since it is only 65,000. The company is now preparing a merchandise budget.
Calculate the following:
What are the budgeted purchases for July?
What is the desired inventory for September?
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