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Precious Stones, Ltd., is a retail jeweler. Most of the firm's business is in jewelry and watches. The firm's average gross profit ratio for jewelry and watches is 60% and 37.5%, respectively. The sales forecast for the next two months for each product category is as follows:The company's policy, which is expected to be achieved at the end of April, is to have ending inventory equal to 200% of the next month's cost of goods sold.Required:a. Calculate the cost of goods sold for jewelry and watches for May and June.b. Calculate a purchases budget, in dollars, for each product for the month of May.
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