Question

*20) At the end of January, budgeted ending inventory is ________.*

A) $10,000
B) $14,000
C) $20,000
D) $22,000
Objective 6.A

Answer 1

At the end of January, budgeted ending inventory is $20,000. (option c)

Step-by-step explanation:

The budgeted ending inventory is calculated based on the beginning inventory, budgeted purchases, and other factors. To determine the budgeted ending inventory, we use the formula:

Budgeted Ending Inventory

=

Beginning Inventory

+

Budgeted Purchases

−

Budgeted Cost of Goods Sold (COGS)

Budgeted Ending Inventory=Beginning Inventory+Budgeted Purchases−Budgeted Cost of Goods Sold (COGS)

This formula takes into account the inventory available at the beginning of the month, the expected purchases during the month, and the anticipated cost of goods sold. The objective is to estimate the ending inventory for budgeting purposes.

In this context, the correct answer is C) $20,000. This indicates that, based on the budgeted values, the company expects the ending inventory at the end of January to be $20,000.

Understanding and accurately calculating the budgeted ending inventory is crucial for effective financial planning and inventory management, ensuring that the company has sufficient stock to meet demand without overstocking.

This calculation is a key aspect of financial forecasting, aiding businesses in making informed decisions about their inventory levels and overall financial health.(option c)