Question

Sander Enterprises prepared the following sales​ budget: Month Budgeted Sales March $ 6,000 April $ 14,000 May $ 11,000 June $ 10,000 The expected gross profit rate is 10​% and the inventory at the end of February was $ 9,000. Desired inventory levels at the end of the month are 20​% of the next​ month's cost of goods sold. What is the budgeted cost of goods sold for​ May?

Answer 1

Answer: Budgeted cost of goods sold for​ May = $9900

Step-by-step explanation:

Given that,

Budgeted Sales for May = $11,000

Expected gross profit rate = 10​%

Inventory at the end of February = $9,000

Desired inventory levels at the end of the month = 20​% of the next​ month's cost of goods sold

Therefore,

Budgeted cost of goods sold for​ May = Sales - 10% of sales

= $11000 - $1100

= $9900