Question

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

Answer 1

Answer:

$202,400

Explanation:

Calculation for what The cost of December merchandise purchases would be:

December merchandise purchases:

November December January

Sales $280,000 $260,000 $250,000

Cost of goods sold (80% of sales)

$224,000 $208,000 $200,000

(80%*$280,000=$224,000)

(80%*$260,000=$208,000)

(80%*$250,000=$200,000)

Add desired ending merchandise inventory(70% of next month's COGS) $145,600 $140,000

(70%*$208,000=$145,600)

(70%*$200,000=$140,000)

Total needs $369,600 $348,000

($224,000+$145,600=$359,600)

($208,000+$140,000=$348,000)

Less beginning merchandise inventory(70% of this month's COGS)

$156,800 $145,600

(70%*$224,000=$156,800)

(70%*$208,000=$145,600)

Required purchases$212,800 $202,400

($369,600-$156,800=$212,800)

($348,000-$145,600=$202,400)

Therefore The cost of December merchandise purchases would be:$202,400