Question

Good Morning Sunshine is a wholesaler of coffee makers. In​ 2012, actual June sales revenue totaled ​$200,000. ​July's sales are expected to increase​ 10% over​ June's sales.​ August's sales are expected to increase​ 15% over​ July's sales. Prices are set to achieve a 60​% gross profit. The company wants to maintain an ending merchandise inventory equal to​ 15% of the next​ month’s cost of goods sold. This requirement was met on July 1st.

The​ company’s budgeted purchases for the month of July are ​$ _____. ​(round to the nearest​ dollar)

Answer 1

June Sales	$                                                                                                           200,000
July Expected Sales	10% Increase in June Sales
July Expected Sales	June Sales*110%
July Expected Sales	200000*110%
July Expected Sales	$                                                                                                           220,000
August Expected Sales	15% Increase in July Sales
August Expected Sales	July Sales*115%
August Expected Sales	220000*115%
August Expected Sales	$                                                                                                           253,000
Gross Profit	60%
Gross Profit	Sales * Gross Profit %
June Gross Profit	200000*60%
June Gross Profit	$                                                                                                           120,000
July Gross Profit	220000*60%
July Gross Profit	$                                                                                                           132,000
August Gross Profit	253000*60%
August Gross Profit	$                                                                                                           151,800
Cost of Goods Sold	Sales - Gross Profit
June Cost of Goods Sold	200000-120000
June Cost of Goods Sold	$                                                                                                             80,000
July Cost of Goods Sold	220000-132000
July Cost of Goods Sold	$                                                                                                             88,000
August Cost of Goods Sold	253000-151800
August Cost of Goods Sold	$                                                                                                           101,200
Month End stock will be	15% of Next month Cost of Goods Sold
June End Stock	15% of July Cost of Goods sold
June End Stock	88000*15%
June End Stock	$                                                                                                             13,200
July End Stock	15% of August Cost of Goods sold
July End Stock	101200*15%
July End Stock	$                                                                                                             15,180
July Purchases	July Cost of Goods Sold + July End Stock - July Opening Stock
July Purchases	88000+15180-13200
July Purchases	$                                                                                                             89,980
Budgeted Purchase for July	$89,980