Soft Shell Purchases Motorcycle Helmets Which It Custom Paints and Sells

question 211

Essay

Soft Shell purchases motorcycle helmets which it custom paints and sells to motorcycle dealers and repair shops worldwide. Sales are expected to be $3,000,000 in June, $4,000,000 in July $4,500,000 in August and $2,500,000 in September. Soft Shell sets it prices to average 40% gross profit on sales revenue. The company wants to keep a minimum inventory of $500,000 plus 15% of the next month's cost of goods sold.
Required:
Prepare an inventory, purchases, and cost of goods sold budget for the months of July, and August.

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Definitions:

Value In Diversity

The benefits and increased performance derived from having a variety of different perspectives and backgrounds in a group or organization.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, leading to competition based on price, quality, and branding.

Limited Market

A market situation characterized by restricted customer base, geographic reach, or size, limiting the potential sales of a product or service.

Average Total Cost

The total cost divided by the quantity of output produced; a measure of cost per unit of output.