How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Neo Your Own Question
Neo, Tutor
Category: Homework
Satisfied Customers: 12101
Experience:  BS Accounting
Type Your Homework Question Here...
Neo is online now
A new question is answered every 9 seconds

Having a little trouble with Problem 7-21a in Fundamentals

Customer Question

Having a little trouble with Problem 7-21a in Fundamentals in Managerial Accounting 6th edition

part C. tell you to put an inventory purchase budget forthe next year.

This is what I came up with and it is telling me that I am incorrect...please help

States COGS is 60% of sales
Companys policy is to keep 10% of next periods estimated cost of goods sold for the current periods ending inventory
(Hint: use the cost of goods sold for the first quarter to determine the beginning inventory for the first quarter)
Estimated ending inventory for next year is 34000

Sales: $231,000 $252,000 $315,000 $252,000
COGS: 138,600 151,200 189,000 151,200
+ des. End Inv: 15,120 18,900 15,120 34,000
Inven. Needed 153,720 170,100 204,120 185,200
- begin invent 13,860 15,120 18,900 15,120
Reqired Purch $139,860 $154,980 $185,220 $170,080

some check figures it gives me are 1st quarter for required peaches is 141120.

I cant see where I went wrong
Submitted: 5 years ago.
Category: Homework
Expert:  Neo replied 5 years ago.
Good day!

Welcome to JustAnswer!

Please download HERE.

Please do not forget to click the Accept button.

For your future questions, please feel free to address them to me by adding "For Neo" at the beginning of your posts.

Thank you so much! :)
Customer: replied 5 years ago.



The book stated to find desired inventory:


that the companys policy is to keep 10% of the next periods estimated cose of goods sold as the current peroids ending inventory. Why is that we used the 20% to get this answer then.

Expert:  Neo replied 5 years ago.

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Neo and other Homework Specialists are ready to help you
Customer: replied 5 years ago.
thanks. that would explain it
Expert:  Neo replied 5 years ago.

You are most welcome and thank you, too. :)

Related Homework Questions