Brooklyn Furniture, a retail store, has an average gross profit ratio of 45%. The sales forecast for the next four months follows:
May $ 271,000
June 218,000
July 321,000
August 424,000
Management's inventory policy is to have ending inventory equal to 320% of the cost of sales for the subsequent month, although it is estimated that the cost of inventory at April 30 will be $414,000.
Required:
Calculate the purchases budget, in dollars, for the months of May and June.
May Purchases:
June Purchases: