Question

Company XYZ has a sales budget for next month of $300,000. Cost of goods sold is expected to be 35% of sales. All units are paid for in the month following purchase. The beginning inventory is $5,000 and an ending inventory of $12,000 is desired. Beginning accounts payable is $105,000. The cost of goods sold for next month is ___________.

Answer 1

Answer:

$105,000

Explanation:

The cost of goods sold requires a straight-forward computation since it is 35% of the budgeted sales amount of $300,000.

Cost of goods sold(budgeted)=$300,000*35%=$105,000.00  

The cost of goods sold for next month is $105,000, which is the same as the beginning accounts payable.

It is so because it is an estimate, not the actual cost of goods sold