[raz1326]

In September 2008, the budget committee of Stein Company assembles the following data:
1. Expected Sales
October $900,000
November 850,000
December 800,000
2. Cost of goods sold is expected to be 60% of sales.
3. Desired ending merchandise inventory is 20% of the next month's cost of goods sold.
4. The beginning inventory at October 1 will be the desired amount.

Instructions
Prepare the budgeted income statement for October through gross profit on sales, including a cost of goods sold schedule.

[morgaine300]

You need to look for an example of that in your textbook. The cost of goods sold is 60% of the sales, so you only need figure out what 60% of the sales for each month is. That's 3 numbers, so I'm not sure what sort of "schedule" they would be referring to.

Now, you will have to make adjustments to figure out how much actually needs to be purchased, but "purchases" is not the same thing as "cost of goods sold." Maybe they mean a purchases schedule?