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Homework answers / question archive / Sales of $ 550 000 are forecast for the third quarter
Sales of $ 550 000 are forecast for the third quarter. Gross profit is 40 per cent of sales, and beginning inventory is 5 165 000. If ending inventory is budgeted as $ 215 000, what are the budgeted purchases? $ 270 000 $ 165 000 $ 380 000 $ 330 000
In the given question we are required to find budgeted purchases-
Beginning inventory+Purchases+Gross profit= Sales + Ending Inventory
Beginning inventory=$165000(given)
Purchases= Required to find
Gross profit= 40% of $550000 = $220000
Sales=$550000(given)
Ending Inventory=$215000(given)
$165000+Budgeted purchases+$220000= $550000+$215000
Budgeted purchases= $380000
Therefore,option (C) is correct.
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