Metro, Inc. sells backpacks. The company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 20% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $70,000
Sales Jan Feb Mar
Bud cost of goods sold 40,000 50,000 60,000
Plus: Desired ending inventory 10,000
Inventory needed 50,000
Less: Beginning inventory (8,000)
Required purchases 42,000
Based on this information the total amount of expected purchases for February is
a. 42,000
b. 62,000
c. 52,00
d. None of the answers is correct