Answer:
Total purchase= $17,650
Explanation:
Giving the following information:
Sales:
Jan= 57,300
Feb= 60,000
Cost of goods sold 50% of sales
Required ending inventory $10,000 + 30% of next month's sales Inventory on hand on Jan 1 $30,000
The budgeted purchases are calculated based on the sales for the month, the ending inventory, deducting the beginning inventory:
Budgeted purchase:
Sales= (0.5*57,300)= 28,650
Ending inventory= 10,000 + (60,000*0.5)*0.3= 19,000
Beginning inventory= (30,000)
Total= 17,650
Answer: $26,650
Explanation:
TO CALCULATE BUDGETED PURCHASE FOR JANUARY, REQUIRED PARAMETERS ARE;
BUDGETED PURCHASE
January = $57,300
February =$60,000
COST OF GOODS SOLD = BEGINNING INVENTORY + PURCHASE BUDGET - ENDING INVENTORY
Cost of goods sold = 50% of required sales
Ending inventory = 30% of next month's sales + $10,000
Beginning inventory = $30,000(inventory on hand on January 1) (inventory carried over from the previous month)
Therefore,
COST OF GOODS SOLD = 0.5 × $57,300 = $28,650
ENDING INVENTORY = (0.3 × $60,000) + $10,000= $28,000
BEGINNING INVENTORY = $30,000
COST OF GOODS SOLD = BEGINNING INVENTORY + PURCHASE BUDGET - ENDING INVENTORY
$28,650 = $30,000 + BUDGETED PURCHASE - $28,000
$28,650+$28,000-$30,000 = BUDGETED PURCHASE
THEREFORE, BUDGETED PURCHASE FOR THE MONTH OF JANUARY = $26,650
