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,then the budgeted change in inventory levels over the month of December is:

Question

Quizplus · Accepted Answer

COGS = 0.30 F1F1F1S1F1F1F10 $40,000 = $12,000
Beginning merchandise inventory + Merchandise purchases = Ending merchandise inventory + COGS
Ending merchandise inventory - Beginning merchandise inventory = Merchandise purchases - COGS
= $18,000 - $12,000 = $6,000

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