Question

Summit Company expects to sel 7,500 units for $165 each for a total of $1,237500 in January and 2,300 unts for $225 each for a total of $517 500 in February The company axpects cost of goods sold to average 70% of sales revenue and the company expects to sell 4,100 units in March for $220 each Summits target ending inventory is $9.000 plus 50% of the next mont's cost of goods sold. Prepare Summits inventory, purchases, and cost of goods sold budget for January and February Summit Company Inventory, Purchases, and Cost of Goods Sold Budget Two months Ended January 31 and February 28 January February Cost of goods sold Plus Desired ending merchandse inventory Total merchandse inventory required Less Beginning merchandse inventory Budgeted purchases Enter any number in the edt fiolds and then continue to the naxt question

Answer 1

Two months Ended January 31 and February 28
	January	February	Marach
Sales in units	7,500	2,300	4,100
Sales price	$165	$225	$220
Sales in dollars	$1,237,500	$517,500	$902,000
Percentage of cost of goods sold	70%	70%	70%
Cost of goods sold	$866,250	$362,250	$631,400
Plus: Desired ending merchandise inventory ($9000+50%*Next Month COGS)	$190,125	$324,700
Total merchandise inventory required	$1,056,375	$686,950
Less: Beginning merchandise inventory	$442,125	$190,125
Budgeted purchases	$614,250	$496,825