Jaguars Corporation has the following information: $\begin{array}{lr}
\text { Month } & \text { Budgeted Sales } \
\hline \text { May } & \$ 46,000 \
\text { June } & 50,000 \
\text { July } & 52,000 \
\text { August } & 48,000
\end{array}$ The cost of goods sold percentage is 65% and the desired inventory level is 25% of next month's sales._____ is the expected total purchases budgeted for June.
A)$40,950
B)$32,825
C)$32,500
D)$17,500

Question

Jaguars Corporation has the following information: $\begin{array}{lr}
\text { Month } & \text { Budgeted Sales } \
\hline  \text { May } & \$ 46,000 \
\text { June } & 50,000 \
\text { July } & 52,000 \
\text { August } & 48,000
\end{array}$ The cost of goods sold percentage is 65% and the desired inventory level is 25% of next month's sales._____ is the expected total purchases budgeted for June.
A)$40,950
B)$32,825
C)$32,500
D)$17,500

Quizplus · Accepted Answer

To calculate the expected total purchases for June, first, determine the cost of goods sold (COGS) for June, which is 65% of June's sales ($50,000 * 65% = $32,500). Then, calculate the desired ending inventory for June, which is 25% of July's sales ($52,000 * 25% = $13,000). The beginning inventory for June is the desired ending inventory for May, which is 25% of June's sales ($50,000 * 25% = $12,500). The formula for total purchases is: Total Purchases = COGS + Desired Ending Inventory - Beginning Inventory. Plugging in the numbers: Total Purchases = $32,500 + $13,000 - $12,500 = $33,000. However, since this option is not available, it appears there was a mistake in my calculation or interpretation. The correct approach involves accurately calculating the desired ending inventory and adjusting the formula accordingly. Given the options, the closest match to the expected process was option B, but the correct calculation should directly relate to the provided options and the correct interpretation of the budgeted sales, COGS, and inventory levels.

Jaguars Corporation Has the Following Information The Cost of Goods Sold Percentage Is 65% and the