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
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![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
$88.200
O $89.600
$93,800
O None of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb844d6a8-1730-46e9-b891-e54f556b2228%2Fe596ba3e-5fac-4fbe-910e-bc1f07312b2e%2Fqlck0hs_processed.jpeg&w=3840&q=75)
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