Budgeted fixed overhead, accounting homework help

Question 5

Spruce Company expects to generate the following sales for the next three months:




Expected sales

$ 330,000

$ 320,000

$ 360,000

Spruce’s cost of goods sold is 40% of sales dollars. At the end of each month, Spruce wants a merchandise inventory balance equal to 30% of the following month’s expected cost of goods sold. What dollar amount of merchandise inventory should Spruce plan to purchase in November?

You must show all your calculations.

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