Marty's Merchandise has budgeted sales as follows for the second quarter of the year:
Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for April, May, and June.
-The beginning inventory for September should be:

Question

Marty's Merchandise has budgeted sales as follows for the second quarter of the year:
  Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for April, May, and June.
-The beginning inventory for September should be:

Quizplus · Accepted Answer

Beginning inventory for September = Ending inventory for August = 15% of September's sales
= 15% × 6,800 units = 1,020 units

Marty's Merchandise Has Budgeted Sales as Follows for the Second