2. Compute the ratio of ending inventory to the next months sales 3. How many un

Question

2. Compute the ratio of ending inventory to the next months sales 3. How many units are budgeted for sale in October
Please use the formatt provided in the picture 13. 20.00 points Waker Company prepares mortíybudgets. The current budget for a September endnginventry of 38,000 unilts. Company policy is to end each month with merchandise inventory equal to a specfied percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the three most recent months follow 180,000 310,000 290,000 206,000 306,000 270,000 WALKER COMPANY Merchandise Purchases Budget For July, August, and September August 38,000 Budgeted unils sales for month Required units of Beginning inventory lunits) Unils to be purchased 206.000 306.000 270,000 July August Next Ratio ot orhi's budgeted sales 38.000 eventory t to nest month's sales 3

Explanation / Answer

Answer (1)

Note

Beginning inventory units= Sales units + Ending inventory - purchase units

Answer no (2)

Answer no .(3)

Ratio of ending Inventory to next month budgeted sales = 0.20 ( see answer no . 2 )

Ending Inventory for the month of September = 38000 units

Budegeted sales units for the month of october = 38000 /0.2 = 190000 units

WALKER COMPANY Merchandise Purchases Budget For July , August and September Purchase Budget Particulars July August September Budgeted ending inventory units    62,000    58,000      38,000 Budegeted units sale for the month 180,000 310,000    290,000 Required units available inventory 242,000 368,000    328,000 Beginning inventory units    36,000    62,000      58,000 Units to be purchased 206,000 306,000    270,000

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