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?

Question

Emmett

Business

28 September, 12:30

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?

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Answers (1)

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Davian Pratt · Answer 1

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

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