Calculate Budgeted Purchases for November

Solution:

Purchases = $421,000

Explanation:

Sales for the month = $700,000

Cost of goods sold = 60% of sales = $700,000 x 60% = $420,000

Opening inventory = $50,000

Closing Inventory = $51,000

We know,

Cost of goods sold = Opening + Purchases - Closing

$420,000 = $50,000 + Purchases - $51,000

$420,000 + $51,000 - $50,000 = Purchases = $421,000

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Purchases = $421,000