The Managerial Accountant at the Holly and Ivy Tree Store

question 159

Essay

The managerial accountant at the Holly and Ivy Tree Store reported that the company anticipates sales of $600,000 in September and October, $625,000 in November, $635,000 in December, and note that the sales figure is $640,000 in January. The August sales revenue was equal to the September sales revenue. The managerial accountant establishes the prices at the Holly and Ivy Tree Store on its merchandise to ensure the company earns 45% gross profit on its sales. The managerial accountant expects the ending inventory at the store to equal 12% of the next month's cost of goods sold.
Compute the COSG, inventory, and purchases budget for October, November, and December.

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