Mario's Record Shop, a retail store, has an average gross profit ratio of 30 percent. The sales forecast for the next four months follows: September $65,000 October $82,000 November $96,000 December $102,000 Mario's inventory policy is to have ending inventory equal to 1.25 times the cost of sales for the subsequent month, although it is estimated that the cost of inventory at August 31 will be $85,000. Calculate the purchases budget, in dollars, for the months of September, October, and November.

Mario's Record Shop, a retail store, has an average gross profit ratio of 30 percent. The sales forecast for the next four months follows: September $65,000 October $82,000 November $96,000 December $102,000 Mario's inventory policy is to have ending inventory equal to 1.25 times the cost of sales for the subsequent month, although it is estimated that the cost of inventory at August 31 will be $85,000. Calculate the purchases budget, in dollars, for the months of September, October, and November.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 14EA: Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is...

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