Answers
SOLUTION
1.
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |
Sales | 377,000 | 303,000 | 272,000 | 485,000 |
Cost of goods sold (60% of sales) | 226,200 | 181,800 | 163,200 | 291,000 |
Add: Desired ending inventory (15%*181,800), (15%*163,200), (15%*291,000) | 27,270 | 24,480 | 43,650 | 33,000 |
Total inventory needed | 253,470 | 206,280 | 206,850 | 324,000 |
Less: Beginning inventory | (32,000) | (27,270) | (24,480) | (43,650) |
Required purchases | 221,470 | 179,010 | 182,370 | 280,350 |
2.
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |
Sales | 522,000 | 462,000 | 415,000 | 650,000 |
Cost of goods sold (60% of sales) | 313,200 | 277,200 | 249,000 | 390,000 |
Add: Desired ending inventory (15%*277,200), (15%*249,000), (15%*390,000) | 41,580 | 37,350 | 58,500 | 33,000 |
Total inventory needed | 354,780 | 314,550 | 307,500 | 423,000 |
Less: Beginning inventory | (32,000) | (41,580) | (37,350) | (58,500) |
Required purchases | 322,780 | 272,970 | 270,150 | 364,500 |
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