Calculate Budgeted Purchases for November
Solution:
Purchases = $421,000
Explanation:
Sales for the month = $700,000
Cost of goods sold = 60% of sales = $700,000 x 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
How much are the budgeted purchases for November? A) $287,000 B) $235,000 C) $245,000 D) $127,000 Purchases = $421,000