Question

In: Accounting

Willow Designs have provided you with the following relevant information: Desired ending inventory 2019      $= 45,673 Expected...

Willow Designs have provided you with the following relevant information:

Desired ending inventory 2019      $= 45,673

Expected sales 2019        $= 382,038

Opening inventory 2019      $= 41,498

Cost of goods sold is 45% of budgeted sales

On the basis of the information provided, calculate the total budgeted purchases for 2019 (rounded to the nearest dollar)

Solutions

Expert Solution

Answer: $176,092

Working:

Cost of goods sold = opening inventory + Purchases - Ending inventory

                 $171,917=$41,498+Purchases-$45,673

                Purchases=$171,917+$45,673-$41,498

Budgeted Purchases for 2019 = $176,092

Note:

Cost of goods sold = 45% of budgeted sales

                                       i.e.=45%*$382,038

                                             =$171,917

ekkarill92 answered 2 years ago
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