Required A Required BPrepare an inventory purchases budget using the marketing consultant's estimate.Note: Round your final answers to nearest whole dollar amount.SalesTotal inventory neededRequired purchases$AFirst Quarter527,000 $0Second Quarter0Required A470,000 $00$Third QuarterRequired B >411,000 $0Fourth Quarter0646,00000 Executive officers of Fanning Company are wrestling with their budget for the next year. The following are two differentsales estimates provided by two different sources.Source of EstimateSales managerMarketing consultantFanning's past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries tomaintain 20 percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. Thisyear's ending inventory is $25,000. Next year's ending inventory is budgeted to be $26,000.Requireda. Prepare an inventory purchases budget using the sales manager's estimate.b. Prepare an inventory purchases budget using the marketing consultant's estimate.Complete this question by entering y Assessment Tool iFrame tabs below.Show Transcribed TextFirst Quarter Second Quarter$ 383,000$ 304,000527,000470,000SalesRequired A Required BRequired APrepare y purchases budget using the sales manager's estimate.Note: Round your final answers to nearest whole dollar amount.Total inventory neededRequired purchases$$First Quarter383,000 $00Third Quarter Fourth Quarter$ 273,000$ 471,000411,000646,000Required ASecond Quarter$304,000 $0Third Quarter0 $Required B>273,00000Fourth Quarter471,000$$00

A purchase budget shows the value of goods a company must purchase to achieve its sale revenue.

Answered: needed 527,000 0 470,000 0 41

Business

Accounting

needed 527,000 0 470,000 0 41

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 6CE: Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following...

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Required A Required B
Prepare an inventory purchases budget using the marketing consultant's estimate.
Note: Round your final answers to nearest whole dollar amount.
Sales
Total inventory needed
Required purchases
$
A
First Quarter
527,000 $
0
Second Quarter
0
Required A
470,000 $
0
0
$
Third Quarter
Required B >
411,000 $
0
Fourth Quarter
0
646,000
0
0

Executive officers of Fanning Company are wrestling with their budget for the next year. The following are two different
sales estimates provided by two different sources.
Source of Estimate
Sales manager
Marketing consultant
Fanning's past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries to
maintain 20 percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. This
year's ending inventory is $25,000. Next year's ending inventory is budgeted to be $26,000.
Required
a. Prepare an inventory purchases budget using the sales manager's estimate.
b. Prepare an inventory purchases budget using the marketing consultant's estimate.
Complete this question by entering y Assessment Tool iFrame tabs below.
Show Transcribed Text
First Quarter Second Quarter
$ 383,000
$ 304,000
527,000
470,000
Sales
Required A Required B
Required A
Prepare y purchases budget using the sales manager's estimate.
Note: Round your final answers to nearest whole dollar amount.
Total inventory needed
Required purchases
$
$
First Quarter
383,000 $
0
0
Third Quarter Fourth Quarter
$ 273,000
$ 471,000
411,000
646,000
Required A
Second Quarter
$
304,000 $
0
Third Quarter
0 $
Required B
>
273,000
0
0
Fourth Quarter
471,000
$
$
0
0

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