Argyle Company Forecasts Sales of $50 000 in January, $60

question 19

Multiple Choice

Argyle Company forecasts sales of $50 000 in January, $60 000 in February, $70 000 in March, and $75 000 in April. The inventory balance at 1 January is $12 000. Cost of sales is budgeted at 40% of sales revenue. Argyle wishes to have inventory levels at the end of each month equal to 60% of the cost of sales for the following month, plus a "safety cushion" of $1 000. How much should be budgeted for inventory purchases in January?

• A)$23 400
• B)$26 400
• C)$22 100
• D)$21 000

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Definitions:

Organizational Assets

Resources owned by an organization that have economic value and can contribute to its operational success and growth.

Property Owned

Assets or possessions that are legally held, owned, or controlled by an individual or entity.

Family History

The health histories of members of a family, which can indicate the genetic predispositions to certain diseases within that family.

Skill

The ability to do something well, acquired through training, experience, or practice.