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20 October, 07:35

Caplico Company has prepared the following sales budget:

Month Budgeted Sales

March $200,000

April 180,000

May 220,000

June 260,000

Cost of goods sold is budgeted at 60% of sales and the inventory at the end of February was $36,000. Desired inventory levels at the end of each month are 20% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?

a.

$52,000

b.

$26,400

c.

$43,200

$31,200

2. Which of the following statements is true of the budgeting process?

a.

It includes qualitative targets of the company, not just quantitative.

b.

It is a continuous process.

c.

It shows the actual performance of the business.

d.

Its success is not dependent on human behavior.

+1
Answers (2)
  1. 20 October, 07:38
    0
    1. b 2. a
  2. 20 October, 07:57
    0
    B 2 A
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