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13 November, 04:03

A company has budgeted sales for January and February of 20,000 and 25,000 units, respectively. The selling price is $5 per unit and the purchase price is $3 per unit. Budgeted ending inventory is 10% of the next month's sales. What is the budgeted cost of purchases for January?

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  1. 13 November, 08:01
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    Instructions are listed below.

    Explanation:

    Giving the following information:

    A company has budgeted sales for January and February of 20,000 and 25,000 units, respectively. The selling price is $5 per unit and the purchase price is $3 per unit. The budgeted ending inventory is 10% of the next month's sales.

    January:

    Sales = 20,000*3 = 60,000

    Ending inventory = 25,000*0.10*3 = 7,500

    Total = $67,500
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