Purchase Budget
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Ellerbrock's, a retail store, has an average gross profit of 21%. The sales forecast for the next four months follows:
September $78,000
October $71,000
November $85,000
December $90,000
Management's inventory policy is to have ending inventory equal to 2.4 times the cost of sales for the subsequent month, although it is estimated that the cost of inventory at August 31st will be $175,000.
Calculate the purchase budget, in dollars, for the months of September, October, and November.
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Purchase Budget
Month September October November December
Sales 78,000 71,000 ...
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