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Neat Logos buys? logo-imprinted merchandise and then sells it to university bookstores
Neat Logos buys? logo-imprinted merchandise and then sells it to university bookstores. Sales are expected to be $ 2,002,000 in?September, $ 2,200,000 in? October, $ 2,383,000 in? November, and $ 2,530,000 in December. Neat Logos sets its prices to earn an average 40?% gross profit on sales revenue. The company does not want inventory to fall below $ 445,000 plus 15?% of the next?month's cost of goods sold. Prepare a cost of goods? sold, inventory, and purchases budget for the months of October and November.
Expert Solution
Solution
| Solution | ||
| October | November | |
| Cost of goods sold | $ 1,320,000.00 | $ 1,429,800.00 |
| Plus : Desired ending inventory | $ 659,470.00 | $ 672,700.00 |
| Total Inventory Required | $ 1,979,470.00 | $ 2,102,500.00 |
| Less: Beginning Inventory | $ 643,000.00 | $ 659,470.00 |
| Purchases | $ 1,336,470.00 | $ 1,443,030.00 |
Working
| October | November | December | |
| Sales (A) | $ 2,200,000 | $ 2,383,000 | $ 2,530,000 |
| Cost of Goods sold (A x 60%) | $ 1,320,000 | $ 1,429,800 | $ 1,518,000 |
.
| Solution | ||
| October | November | |
| Cost of goods sold | 1320000 | 1429800 |
| Plus : Desired ending inventory | =+(445000)+(1429800*15%) | =+(445000)+(1518000*15%) |
| Less: Beginning Inventory | =+(445000)+(1320000*15%) | 659470 |
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