Sander Enterprises prepared the following sales budget:
Month Budgeted Sales
March $8,000
April $13,000
May $12,000
June $14,000
The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.
a. What is the desired beginning inventory on June 1st?
b. What is the desired ending inventory on May 31st?
c. What is the budgeted cost of goods sold for May?
