Question

Blossom Company estimates that 2020 sales will be $40000 in quarter 1, $48000 in quarter 2, and $58000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 12% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.

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