Willard's Department Store has budgeted cost of goods sold of $38,000 for its men's shorts in March. Management also wants to have $7200 of men's shorts in inventory at the end of March to prepare for the summer season. Beginning inventory of men's shorts for March is expected to be $5800. What dollar amount of men's shorts should be purchased in March?

Question

Quizplus · Accepted Answer

The formula for determining the purchases needed is:
Cost of goods sold + desired ending inventory - beginning inventory = purchases
Therefore, using the information provided in the problem, we can plug in the values to get:
$38,000 + $7,200 - $5,800 = $39,400
Thus, Willard's Department Store should purchase $39,400 worth of men's shorts in March.

Willard's Department Store Has Budgeted Cost of Goods Sold of $38,000