Assume a merchandising company’s estimated sales for January, February, and March are $101,000, $121,000, and $111,000, respectively. Its cost of goods sold is always 30% of its sales. The company always maintains ending merchandise inventory equal to 10% of next month’s cost of goods sold. What are the required merchandise purchases for January? Multiple Choice $29,700 $33,740 $36,300 $30,900
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.
Assume a merchandising company’s estimated sales for January, February, and March are $101,000, $121,000, and $111,000, respectively. Its cost of goods sold is always 30% of its sales. The company always maintains ending merchandise inventory equal to 10% of next month’s cost of goods sold. What are the required merchandise purchases for January?
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$29,700
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$33,740
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$36,300
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$30,900
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