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Avery’s Bicycle Shop, a retail store, has an average gross profit ratio of 28 percent. The sales forecast for the next four months follows: Management’s inventory policy is to have ending inventory equal to 1.4 times the cost of sales for the subsequent month, although it is estimated that the cost of inventory at March 31 will be $170,000.Calculate the purchases budget, in dollars, for the months of April, May, and June.
April$130,000$36,400$93,600 May$164,000$45,920$118,080 June$192,000$53,760$138,240 Purchase BudgetAprilBudgeted cost of goods sold$93,600Add: Desired Ending Inventory$165,312Total…
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