The merchandise purchases budget is similar to the production budget. The purchases budget can be done in units or in total dollars. Typically, the purchases budget is done in dollars and will use a cost of goods sold percentage to determine the cost of inventory sales. Remember, cost of goods sold is literally the cost of .In a merchandising company, the production budget and the three manufacturing budgetsdirect materials, direct labor, and manufacturing overheadare replaced with the merchandise purchases budget. This budget is prepared using the same three components as the production budgetsales, required ending .
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