Walker Entertainment is a distributor of video games and expects its video game sales to be as follows for the first 4 months of 2014: January $100,000 February $150,000 March $180,000 April $200,000 Walker’s cost of goods sold is 70% of sales. Ending inventory is expected to equal 40% of the next month's cost of goods sold. How much are budgeted inventory purchases for February?
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.
Walker Entertainment is a distributor of video games and expects its video game sales to be as follows for the first 4 months of 2014:
January $100,000
February $150,000
March $180,000
April $200,000
Walker’s cost of goods sold is 70% of sales. Ending inventory is expected to equal 40% of the next month's cost of goods sold. How much are budgeted inventory purchases for February?
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