70.2K

Verified Solution

Link Copied!

Executive officers of Franklin 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 Sales manager Marketing consultant First Quarter $380,000 527,000 Second Quarter $310,000 466,000 Third Quarter $286,000 413,000 Fourth Quarter $477,000 651,000 Franklin's past experience indicates that cost of goods sold is about 60 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 $22,000. Next year's ending inventory is budgeted to be $23,000. Required a. Prepare an inventory purchases budget using the sales manager's estimate. b. 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.) Second First Quarter Third Quarter Fourth Quarter Quarter S 380,000 S 310,000 $ 286,000 S 477,000 Sales Total inventory needed 0 0 0 0 Required purchases S 0 S 0 S 0 S 0 Executive officers of Franklin 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 Sales manager Marketing consultant First Quarter $380,000 527,000 Second Quarter $310,000 466,000 Third Quarter $286,000 413,000 Fourth Quarter $477,000 651,000 Franklin's past experience indicates that cost of goods sold is about 60 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 $22,000. Next year's ending inventory is budgeted to be $23,000. Required a. Prepare an inventory purchases budget using the sales manager's estimate. b. 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 marketing consultant's estimate. (Round your final answers to nearest whole dollar amount.) First Quarter Second Fourth Quarter Third Quarter Quarter S 527,000 S 466,000 $ 413,000 S 651,000 Sales Total inventory needed 0 0 0 0 Required purchases $ 0 0 S 0 S 0

Answer & Explanation Solved by verified expert

See Answer