Next year\'s sales forecast shows that 20,000 units of Product A and 22,000 unit

Question

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. Total budgeted sales of both products for the year would be: Budgeted purchases of Product A for the year would be: Budgeted purchases of Product B for the year would be:

Explanation / Answer

Total budgeted sales of both products for the year would be 20,000 units of Product A and 22,000 units of Product B Budgeted purchases of Product B for the year = 22500 units Opening Inventory + Purchases - Closing Inventory = Sale units 2500 units + Purchases - 3000 units = 22000 units Purchases = 22000 + 500 = 22500 units Budgeted purchases of Product B for the year = 20400 units Opening Inventory + Purchases - Closing Inventory = Sale units 2000 units + Purchases - 2400 units = 20000 units Purchases = 20000 + 400 = 20400 units

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