Komodo Supply Company's monthly sales budget is as follows: April $160,000, May $130,000, and June $120,000. The company's policy is to set selling prices to earn a 30% gross profit on sales revenue and to maintain an ending inventory balance equal to 40% of the next month's cost of goods sold. What is the dollar amount of inventory purchases that is budgeted for the month of May? O $87,800 O $88,200 O $89,600 O $93,800 O None of the above

Komodo Supply Company's monthly sales budget is as follows: April $160,000, May $130,000, and June $120,000. The company's policy is to set selling prices to earn a 30% gross profit on sales revenue and to maintain an ending inventory balance equal to 40% of the next month's cost of goods sold. What is the dollar amount of inventory purchases that is budgeted for the month of May? O $87,800 O $88,200 O $89,600 O $93,800 O None of the above

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...

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A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
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