Question

Question 20 0.6 out o Sander Enterprises prepared the following sales budget: Month March April May June Budgeted Sales $8000 $14,000 $15,000 $17,000 The expected gross profit rate is 20% and the inventory at the end of February was $11,000. Desired inventory levels at the end of the month are 30% of the next month's cost of goods sold. What is the desired beginning inventory on June 1? Selected Answer: $4080

Answer 1

	Inventory Budget
	Particulars			March	April	May	June
	Sales			$ 8,000.00	$ 14,000.00	$ 15,000.00	$ 17,000.00
Less:	Gross Profit			$ 1,600.00	$   2,800.00	$   3,000.00	$   3,400.00
	Cost of Goods Sold			$ 6,400.00	$ 11,200.00	$ 12,000.00	$ 13,600.00
Add:	Desired ending inventory			$ 3,360.00	$   3,600.00	$   4,080.00	$               -
	Desired beginning inventory on June 1 = Desired ending inventory on May 31 = $ 4080