Question 7
Charter Company is preparing their budget for the 1st quarter of 2012. The following data is provided:
Inventory, Purchases and COGS
Budget
Cost of goods sold (a)
Desired ending inventory(b)
Total inventory required
less Beginning inventory
Purchases
(a) COGS = 75% of sales
(b) $5,000 - 20% of COGS for
next month
Jan
Feb
Mar
$30,000
$28,500
$22,500
10,700
9,500
9,800
40,700
38,000
32,300
(11,000)
(10,700)
(9,500)
29,700
27,300
22,800
For the budgeted balance sheet at March 31, what amount should be shown for Inventory?
$9.500
$10,700
$8.750
$9.800