Question

Olga's Company has a sales budget for next month of $150,000. Cost of goods sold is expected to be 40 percent of sales. All goods are purchased in the month used and paid for in the month following purchase. The beginning inventory of merchandise is $5,000, and an ending inventory of $6,000 is desired. Beginning accounts payable is $38,000. The cost of goods sold for next month is expected to be a.$60,000. b.$40,000. c.$89,000. d.$90,000.

Answer 1

Answer:

a. $60,000

Explanation:

Costs of goods sold = Budgeted sales for next month * 40%

Costs of goods sold = $150,000 * 40%

Costs of goods sold = $60,000

So therefore, the cost of goods sold for next month is expected to be $60,000.