Caplico Company Has Prepared the Following Sales Budget Cost of Goods Sold Is Budgeted at 60% of Sales

question 26

Multiple Choice

Caplico Company has prepared the following sales budget: $$\begin{array} { | r | r | } \hline \text { Month } & \text { Budgeted Sales } \\\hline \text { March } & \$ 200,000 \\\hline \text { April } & 180,000 \\\hline \text { May } & 220,000 \\\hline \text { Tune } & 260,000 \\\hline\end{array}$$ Cost of goods sold is budgeted at 60% of sales and the inventory at the end of February was $36,000. Desired inventory levels at the end of each month are 20% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?

• A) $52,000
• B) $26,400
• C) $43,200
• D) $31,200

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Definitions:

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