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24 April, 18:01

Skymont Company wants an ending inventory each month equal to 30% of that month's cost of goods sold. Cost of goods sold for February is projected at $45,000. Ending inventory at the end of January was $12,000. Based on this information, purchases for February would be: (A) $43,500. (B) $31,500. (C) $33,000. (D) $46,500.

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  1. 24 April, 18:03
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    D Purchase of Feb = $46500

    Explanation:

    Using formula

    Cost of Goods Sold

    Add : Ending inventory of Feb

    Good available for sale for Feb

    Less: Beginning Inventory of Feb

    Good Purchase in Feb

    Hence,

    45000 + (45000 x 30% = 13500) = $58500 - $12000 = $46500
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