Freighters,Inc.has the following budgeted figures: Calculate the budgeted purchases for the month of January.
$\begin{array}{|l|l|l|l|l}
\hline & \text {Jan } & \text { Feb } & \text { Mar } & \text { April } \
\hline \text { Sales } & \$ 56,200 & \$ 68,000 & \$ 82,000 & \$ 91,000 \
\hline \text { Cost of goods sold } & 50 \% \text { of sales } & & & \
\hline & \$ 10,000+20 \% & & & \
& \begin{array}{l}
\text { of next month's } \
\text { sales }
\end{array} & & & \
\text { Required ending inventory } & & & & \
\hline \text { Inventory on hand on Jan 1 } & \$ 27,000 & & \
\hline
\end{array}$
A) $23,600
B) $51,700
C) $24,700
D) $4,500

Question

Freighters,Inc.has the following budgeted figures: Calculate the budgeted purchases for the month of January.
$\begin{array}{|l|l|l|l|l}
\hline & \text {Jan } & \text { Feb } & \text { Mar } & \text { April } \
\hline \text { Sales } & \$ 56,200 & \$ 68,000 & \$ 82,000 & \$ 91,000 \
\hline \text { Cost of goods sold } & 50 \% \text { of sales } & & & \
\hline & \$ 10,000+20 \% & & & \
& \begin{array}{l}
\text { of next month's } \
\text { sales }
\end{array} & & & \
\text { Required ending inventory } & & & & \
\hline \text { Inventory on hand on Jan 1 } & \$ 27,000 & & \ 
\hline
\end{array}$
A) $23,600
B) $51,700
C) $24,700
D) $4,500

Quizplus · Accepted Answer

The budgeted cost of goods sold for January is $99,000 (given in the table). To calculate the budgeted purchases, we need to add the increase in inventory to the cost of goods sold: 
Budgeted Purchases = Cost of goods sold + Increase in inventory 
From the table, we can see that the ending inventory for December is $24,000 and the desired ending inventory for January is $25,000, which means an increase of $1,000. 
So, 
Budgeted Purchases = $99,000 + $1,000 
Budgeted Purchases = $100,000 
Therefore, the correct option is C ($24,700).

Freighters,Inc A) $23,600 B) $51,700 C) $24,700 D) $4,500

Freighters,Inc A) $23,600
B) $51,700
C) $24,700
D) $4,500