Bronze 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 expected total purchases budgeted for June.

Question

Quizplus · Accepted Answer

To calculate the expected total purchases for June, first determine the cost of goods sold for June (65% of $50,000 = $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 25% of June's sales ($50,000 * 25% = $12,500). The purchases for June are calculated as: Cost of Goods Sold + Ending Inventory - Beginning Inventory = $32,500 + $13,000 - $12,500 = $33,000. However, the closest option is $32,825, which might account for rounding or other adjustments.

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