Question: 1. Rockgate Company's July sales budget calls for sales of $400,000. The store expects to begin July with $40,000 of inventory and to end the month with $50,000 of inventory. Gross margin is typically 30% of sales. Determine the budgeted cost of merchandise purchases for July
2. Activity-based budgeting is a budget system based on expected activities.
(1) Describe activity-based budgeting, and explain its preparation of budgets.
(2) How does activity-based budgeting differ from traditional budgeting?