Question

Brandon Company has prepared the following sales budget:
	Month	Budgeted Sales
	March	$200,000
	April	180,000
	May	220,000
	June	240,000
Cost of goods sold is budgeted at 40% of sales and the inventory at the end of February
was $40,000. Desired inventory levels at the end of each month are 20% of the next
month's cost of goods sold. What is the desired beginning inventory on June 1?
So, beginning Inventory for June is ending inventory for May. End Inv May = 20% June CGS

Answer 1

Desired beginning inventory on June 1 = Desired ending inventory of May = 20% of cost of goods sold of June = 20% * ( 240000 * 40% )

19200