Benjamin Company has the following data:
$\begin{array}{ll}\text { Month }&\text { Budgeted Sales }\
\text { January } & \$ 108,000 \
\text { February } & 132,000 \
\text { March } & 144,000 \
\text { April } & 120,000
\end{array}$
Cost of goods sold average 60% of sales.The inventory at December 31 was $19,440.Desired ending inventory levels are 20% of next month's sales at cost.What is the desired ending inventory value at February 28?
A) $15,840
B) $17,280
C) $26,400
D) $28,800

Question

Quizplus · Accepted Answer

The desired ending inventory for February is 20% of March's sales at cost. March's sales are $144,000, and the cost is 60% of sales, so $144,000 * 60% = $86,400. 20% of $86,400 is $17,280.

Benjamin Company Has the Following Data Cost of Goods Sold Average 60% of Sales