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Powerpoint Company, a wholesaler of grain, has a sales budget for July of $300,000. Sales are expected to increase at a rate of 10% per month. The cost of grain is expected to be 40% of sales each month. All purchases are paid for in the month following purchase. The opening inventory (1St July) of grain is $10,000, and the desired closing inventory level is 10% of the amount required to meet the following months sales. The opening balance of accounts payable is $76,000.
Problem 1: The cost of grains sold during July is expected to be:
Select one:
a. $132,000
b. $76,000
c. $120,000
d. $123,200
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