The Willsey Merchandise Company has budgeted $40,000 in sales for the month of December.The company's cost of goods sold is 30% of sales.If the company has budgeted to purchase $18,000 in merchandise during December,what is the budgeted change in inventory levels over the month of December?

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Quizplus · Accepted Answer

The cost of goods sold (COGS) is 30% of sales, so COGS = 0.30 * $40,000 = $12,000. If the company plans to purchase $18,000 in merchandise, the budgeted change in inventory is the difference between purchases and COGS, which is $18,000 - $12,000 = $6,000 increase.

The Willsey Merchandise Company Has Budgeted $40,000 in Sales for the Month