Leaverton's Forecast of Sales Is as Follows: July,$60,000; August,$90,000; September,$130,000

question 91

Multiple Choice

Leaverton's forecast of sales is as follows: July,$60,000; August,$90,000; September,$130,000.Sales are normally 80 percent cash and 20 percent credit in any month.Credit sales are collected in full in the following month.Merchandise cost averages 60 percent of sales price.The company desires an inventory as of September 30 of $52,000.The inventory as of June 30 was $25,000. Total purchases that must be made in order to meet sales and inventory requirements for the quarter amount to

• A) $195,000.
• B) $253,000.
• C) $141,000.
• D) $307,000.

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Definitions:

Planning Budget

A financial plan that estimates future revenues, expenses, and resources needed for a specific time period, helping manage resources effectively.

Revenue Variances

The differences between actual revenue generated and the expected (or budgeted) revenue over a specific period.

Spending Variances

Differences between the budgeted or standard cost of production and the actual cost incurred.

Customers Served

The number of clients or customers who have purchased a company's goods or services within a specific time frame.