Question

Wallace Company provides the following data for next​ year: Month Budgeted Sales January ​$120,000 February ​ 108,000 March ​ 140,000 April ​ 147,000 The gross profit rate is​ 35% of sales. Inventory at the end of December is​ $29,600 and target ending inventory levels are​ 10% of next​ month's sales, stated at cost. What is the amount of purchases budgeted for​ January

Answer 1

Total purchase= $55,420

Step-by-step explanation:

Giving the following information:

Wallace Company provides the following data for next​ year: Month Budgeted Sales January ​$120,000 February ​ 108,000. Inventory at the end of December is​ $29,600 and target ending inventory levels are​ 10% of next​ month's sales, stated at cost.

The gross profit rate is​ 35% of sales.

Cost of January= 120,000*0.65= 78,000

Purchase for Febraury= [(108000*0.65)*0.10]= 7,020

Beginning inventory= 29,600 (-)

Total purchase= $55,420