Answer:
See the explanation below.
Explanation:
Note: The 4,100 correct units for January is used instead of the mistakenly written one in the question.
1. Prepare the sales budget for January and February.
January sales revenue budget = 4,100 * $220 = $902,000
February sales revenue budget = 3.800 * $220 = $836,000
2. Prepare the company's cost of goods sold
Cost of good sold
January cost of good sold budget = $902,000 * 50% = $451,000
February cost of good sold budget = $836,000 * 50% = $418,000
Inventory
March sales revenue budget = 4.600 * $280 = $1,288,000
March cost of good sold budget = $1,288,000 * 50% = $644,000
January ending inventory = $9,000 + (50% * $418,000) = $218,000
February ending inventory = $9,000 + (50% * $644,000) = $331,000
Purchase
Beginning inventory + Purchases - ending inventory = cost of good sold
Purchases = Cost of good - Beginning inventory + Ending inventory
January purchases budget = $451,000 - 0 + $218,000 = $699,000
February purchases budget = $418,000 - $218,000 + $331,000 = $531,000
