May Corporation, a merchandising firm, has budgeted sales as follows for the third quarter of the year: Cost of goods sold is equal to 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the Cost of Goods Sold for the following month. The inventory on June 30 is less than this ideal since it is only $65,000. The company is now preparing a Merchandise Purchases Budget. The desired beginning inventory for September is:
A)$117,000
B)$76,050
C)$91,000
D)$59,150

Question

May Corporation, a merchandising firm, has budgeted sales as follows for the third quarter of the year:  Cost of goods sold is equal to 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the Cost of Goods Sold for the following month. The inventory on June 30 is less than this ideal since it is only $65,000. The company is now preparing a Merchandise Purchases Budget. The desired beginning inventory for September is:
A)$117,000 
B)$76,050 
C)$91,000 
D)$59,150

Quizplus · Accepted Answer

The Answer of May Corporation, a merchandising firm, has budgeted sales as follows for the third quarter of the year:  Cost of goods sold is equal to 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the Cost of Goods Sold for the following month. The inventory on June 30 is less than this ideal since it is only $65,000. The company is now preparing a Merchandise Purchases Budget. The desired beginning inventory for September is:
A)$117,000 
B)$76,050 
C)$91,000 
D)$59,150

May Corporation, a Merchandising Firm, Has Budgeted Sales as Follows