**Concord Company Sales Estimate and Merchandise Purchases Budget Analysis****Sales Estimates for 2022:**- **Quarter 1:** $34,400- **Quarter 2:** $41,280- **Quarter 3:** $49,880**Cost Structure and Inventory Management:**- **Cost of Goods Sold (COGS):** 50% of sales.- **Desired Ending Merchandise Inventory:** 10% of the next quarter's expected cost of goods sold.**Objective:**Prepare a merchandise purchases budget by quarter for the first six months of 2022.**Merchandise Purchases Budget Template:**| | Quarter 1 | Quarter 2 | Six Months ||---------------------|-----------|-----------|------------|| **Cost of Goods Sold** | | | || **+ Desired Ending Inventory** | | | || **= Total Needs** | | | || **- Beginning Inventory** | | | || **= Required Purchases** | $ | $ | $ |**Notes:**- The budget template outlines the steps for calculating the required purchases each quarter.- Begin with the cost of goods sold and add the desired ending inventory to determine total needs.- Subtract the beginning inventory to arrive at the required purchases for each quarter.

The purchase budget is referred as a detailed plan that outlines number of units the company needs to purchase to meet its sales forecast and maintain desired inventory levels.Direct material cost is the cost of raw material produced or purchased to produce the final product.123Six monthsBudgeted Cost of Goods Sold$34,400*50% = $17,200$41,280*50% = $20,640$49,880*50% = $24,940Add: Desired ending merchandise inventory$20,640 * 10% = $2,064$24,940 * 10% = $2,494Total required units$17,200 + $2,064 = $19,264$20,640 + $2,494 = $23,134Less: Beginning merchandise inventory$17,200 * 10% = 172020640 * 10% = 2064Required Merchandise Purchases$19,264 - $1,720 = $17,544$23,134 - $2,064 = $21,070$17,544 + $21,070 = $38,614Concord CompanyMerchandise Purchases Budget For the Six month Ending June 30, 2022Quarter12Six monthsBudgeted Cost of Goods Sold$17,200$20,640Add: Desired ending merchandise inventory$2,064$2,494Total required units$19,264$23,134Less: Beginning merchandise inventory$1,720$2,064Required Merchandise Purchases$17,544$21,070$38,614

Business

Accounting

Concord Company estimates that 2022 sales will be $34,400 in quarter 1, $41,280 in quarter 2, and $49,880 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending merchandise inventory equal to 10% of the next quarter's expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2022. v CONCORD COMPANY Merchandise Purchases Budget $ $ 1 Quarter 2 Six Months

Concord Company estimates that 2022 sales will be $34,400 in quarter 1, $41,280 in quarter 2, and $49,880 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending merchandise inventory equal to 10% of the next quarter's expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2022. v CONCORD COMPANY Merchandise Purchases Budget $ $ 1 Quarter 2 Six Months

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 8P: Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning...

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

**Concord Company Sales Estimate and Merchandise Purchases Budget Analysis**

**Sales Estimates for 2022:**
- **Quarter 1:** $34,400
- **Quarter 2:** $41,280
- **Quarter 3:** $49,880

**Cost Structure and Inventory Management:**
- **Cost of Goods Sold (COGS):** 50% of sales.
- **Desired Ending Merchandise Inventory:** 10% of the next quarter's expected cost of goods sold.

**Objective:**
Prepare a merchandise purchases budget by quarter for the first six months of 2022.

**Merchandise Purchases Budget Template:**

| | Quarter 1 | Quarter 2 | Six Months |
|---------------------|-----------|-----------|------------|
| **Cost of Goods Sold** | | | |
| **+ Desired Ending Inventory** | | | |
| **= Total Needs** | | | |
| **- Beginning Inventory** | | | |
| **= Required Purchases** | $ | $ | $ |

**Notes:**
- The budget template outlines the steps for calculating the required purchases each quarter.
- Begin with the cost of goods sold and add the desired ending inventory to determine total needs.
- Subtract the beginning inventory to arrive at the required purchases for each quarter.

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