Question

Sam's Toys budgeted sales of $ 700 comma 000 for the month of November and cost of goods sold equal to 60​% of sales. Beginning inventory for November was $ 50 comma 000 and ending inventory for November is estimated at $ 51 comma 000. How much are the budgeted purchases for​ November?
A) $287,000
B) $235,000
C) $245,000
D) $127,000

Answer 1

Answer:

Purchases = $421,000

Explanation:

Sales for the month = $700,000

Cost of goods sold = 60 % of sales = $700,000 $\times$ 60% = $420,000

Opening inventory = $50,000

Closing Inventory = $51,000

We know,

Cost of goods sold = Opening + Purchases - Closing

$420,000 = $50,000 + Purchases - $51,000

$420,000 + $51,000 - $50,000 = Purchases = $421,000

Options provided are invalid

Purchases = $421,000