Seaworthy Company, a merchandising company, has prepared the following sales budget: Month Budgeted Sales March $200,000.00 April 217,000 May 226,000 June 258,000 Cost of goods sold is budgeted at 50% of sales, and the inventory at the end of February was $35,000.00. Desired inventory levels at the end of each month are 30% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?
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.
Question:
Seaworthy Company, a merchandising company, has prepared the following sales budget:
Month
Budgeted Sales
March
$200,000.00
April
217,000
May
226,000
June
258,000
Cost of goods sold is budgeted at 50% of sales, and the inventory at the end of February was $35,000.00. Desired inventory levels at the end of each month are 30% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?
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