Skymont Company wants an ending inventory each month equal to 30% of that month's cost of goods sold. Cost of goods sold for February is projected at $45,000. Ending inventory at the end of January was $12,000. Based on this information, purchases for February would be: (A) $43,500. (B) $31,500. (C) $33,000. (D) $46,500.

Question

Business

Seamus Ellis

3 February, 08:08

Skymont Company wants an ending inventory each month equal to 30% of that month's cost of goods sold. Cost of goods sold for February is projected at $45,000. Ending inventory at the end of January was $12,000. Based on this information, purchases for February would be: (A) $43,500. (B) $31,500. (C) $33,000. (D) $46,500.

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Answers (1)

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Owens · Answer 1

D Purchase of Feb = $46500

Explanation:

Using formula

Cost of Goods Sold

Add : Ending inventory of Feb

Good available for sale for Feb

Less: Beginning Inventory of Feb

Good Purchase in Feb

Hence,

45000 + (45000 x 30% = 13500) = $58500 - $12000 = $46500