Barker Office Supply Store Is Budgeting for the Fiscal Year

question 127

Essay

Barker Office Supply Store is budgeting for the fiscal year ending March 31,2020.During the fiscal year ended March 31,2019,sales totaled $1,200,000 and cost of goods sold was $660,000.At March 31,2019,inventory was $200,000.During the upcoming fiscal year,Barker estimates that cost of goods sold will increase by 9% and that ending inventory will be $225,000.
Required: How much inventory should Barker purchase during the fiscal year ending March 31,2020? Show your well-labeled computations.

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Definitions:

Capital Market

The input/factor market in which households supply their savings, for interest or for claims to future profits, to firms that demand funds to buy capital goods.

Investment

New capital additions to a firm’s capital stock. Although capital is measured at a given point in time (a stock), investment is measured over a period of time (a flow). The flow of investment increases the capital stock.

Demand Curve

A graph showing the relationship between the price of a good and the amount of it that consumers are willing to purchase at various prices.

Hoverboards

Self-balancing scooters that use gyroscopic technology to allow users to move based on the direction and speed of their body lean.