Silver Corporation has the following information: $\begin{array}{ll}
\text { Month } & \text { Budgeted Sales } \
\text { May } & \$ 46,000 \
\text { June } & 50,000 \
\text { July } & 52,000 \
\text { August } & 48,000
\end{array}$ The cost of goods sold percentage is 65% and the desired inventory level is 25% of next month's sales is the desired beginning inventory for August.

Question

Quizplus · Accepted Answer

The desired beginning inventory for August is 25% of September's sales. Since September's sales are not provided, we assume the pattern continues, and use August's sales: 25% of $48,000 = $12,000. However, the question asks for the cost of goods sold, which is 65% of this inventory: $12,000 * 0.65 = $7,800.

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