Use the information below to answer the following question(s).
Peabody Enterprises prepared the following sales budget:

The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.
-What is the desired beginning inventory on June 1 at Peabody Enterprises?

Question

Use the information below to answer the following question(s).
Peabody Enterprises prepared the following sales budget:
  
The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.
-What is the desired beginning inventory on June 1 at Peabody Enterprises?

Quizplus · Accepted Answer

B) Sales = 100% - 40% Gross Profit = 60% Cost of Goods Sold(CGS)
Now: June Sales $14,000 × 60% = 8,400(CGS) × 20% = $1,680

Use the Information Below to Answer the Following Question(s)