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In: Accounting

Executive officers of Benson Company are wrestling with their budget for the next year. The following...

Executive officers of Benson Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources:

Source of Estimate First Quarter Second Quarter Third Quarter Fourth Quarter
Sales manager $ 389,000 $ 315,000 $ 280,000 $ 471,000
Marketing consultant 516,000 457,000 406,000 649,000

Benson’s past experience indicates that cost of goods sold is about 55 percent of sales revenue. The company tries to maintain 15 percent of the next quarter’s expected cost of goods sold as the current quarter’s ending inventory. This year’s ending inventory is $31,000. Next year’s ending inventory is budgeted to be $32,000.

Required

Prepare an inventory purchases budget using the sales manager’s estimate.

Prepare an inventory purchases budget using the marketing consultant’s estimate.  Complete this question by entering your answers in the tabs below.

Required A

Required B

Prepare an inventory purchases budget using the sales manager’s estimate. (Round your final answers to nearest whole dollar amount.)
First Quarter Second Quarter Third Quarter Fourth Quarter
Sales $389,000 $315,000 $280,000 $471,000
Cost of goods sold
Less: Desired ending inventory
Total inventory needed 0 0 0 0
Required purchases $0 $0 $0 $0
Complete this question by entering your answers in the tabs below.

Required A

Required B

Prepare an inventory purchases budget using the marketing consultant’s estimate. (Round your final answers to nearest whole dollar amount.)
First Quarter Second Quarter Third Quarter Fourth Quarter
Sales $516,000 $457,000 $406,000 $649,000
Total inventory needed 0 0 0 0
Required purchases $0 $0 $0 $0

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Expert Solution

ekkarill92 answered 1 year ago
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