Question

marty's merchandise has budgeted sales as follows for the second quarter of the year: april $30,000 may $60,000 june $50,000 cost of goods sold is equal to 70% of sales. the company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. the inventory on march 31 was below this target and was only $22,000. the company is now preparing a merchandise purchases budget for april, may, and june. the desired beginning inventory for june is:

Answer 1

The desired beginning inventory for June at Marty's Merchandise is calculated to be $50,400, which is 120% of May's cost of goods sold.

Step-by-step explanation:

The student is asking for the desired beginning inventory for June at Marty's Merchandise. They have provided their sales budget for April ($30,000), May ($60,000), and June ($50,000). The cost of goods sold (COGS) is 70% of sales, and they wish to maintain an ending inventory equal to 120% of the next month's COGS.

To calculate the desired beginning inventory for June, we need to calculate May's COGS first and then calculate 120% of that amount:

• COGS for May = 70% of May's Sales
• COGS for May = 70% of $60,000 = $42,000
• Desired inventory for June = 120% of May's COGS
• Desired inventory for June = 120% of $42,000 = $50,400

Therefore, the desired beginning inventory for June is $50,400.

Answer 2

Based on the available information, the desired beginning inventory for June is $50,400

To determine the desired beginning inventory for June, we need to calculate the cost of goods sold and the desired ending inventory for May.

1. Calculate the cost of goods sold (COGS) for May:

COGS = Sales in May * Cost of goods sold percentage

COGS = $60,000 * 70% = $42,000

2. Calculate the desired ending inventory for May:

Desired Ending Inventory = COGS for June * 120%

Desired Ending Inventory = $42,000 * 120% = $50,400

3. Calculate the desired beginning inventory for June:

Desired Beginning Inventory = Desired Ending Inventory for May

Desired Beginning Inventory = $50,400

Therefore, the desired beginning inventory for June is $50,400.