The Willsey Merchandise Company has budgeted $50,000 in sales for the month of December. The company's cost of goods sold is 30% of sales. If the company has budgeted to purchase $20,600 in merchandise during December, then the budgeted change in inventory levels over the month of December is:

	$29,400 decrease
	$14,400 decrease
	$19,000 increase
	$5,600 increase

COGS = 0.30 × $50,000 = $15,000

Beginning merchandise inventory + Merchandise purchases = Ending merchandise inventory + COGS

Ending merchandise inventory − Beginning merchandise inventory = Merchandise purchases − COGS

= $20,600 − $15,000 = $5,600