mework Saved Help Save & Exit Submit Check my work Keggler\'s Supply is a mercha

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mework Saved Help Save & Exit Submit Check my work Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 20,500 units sports equipment, 81,500 units; and apparel, 49,000 units. Management believes each of these inventorles is too high. As a result, a new policy dictates that ending inventory in any month should equal 32% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel Budgeted Sales in Unite March April May June 15,000 26,500 32,50035,000 68,000 90,000 95,000 90,000 41,000 38,500 33,500 24,000 Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. KEGGLER'S SUPPLY Merchandise Purchases Budget For March, April, and May March April May 26,500 32% 8.480 32,500 32% 10.400 35,000 32% 11.200 Budgeted sales for next month Ratio of ending inventory to future sales Budgeted ending inventory Budgeted units sales for month Required units of available merchandise Actual (or estimated) beginning inventory Budgeted purchases SPORTS EQUIPMENT Prev 2 of 71 Next >

Explanation / Answer

KEGGLER'S SUPPLY

Merchandise Purchase Budget

For March, April and May

Budgeted ending inventory = (Budgeted sales for next month * Ratio of ending inventory to future sales)

Required units of available merchandise = (Budgeted ending inventory + Budgeted unit sales for month)

Budgeted purchaes = (Required units of available merchandise - Actual (or estimated) beginning inventory)

March April May FOOTWEAR Budgeted sales for next month 26,500 32,500 35,000 Ratio of ending inventory to future sales 32% 32% 32% Budgeted ending inventory 8,480 10,400 11,200 Budgeted unit sales for month 15,000 26,500 32,500 Required units of available merchandise 23,480 36,900 43,700 Actual (or estimated) beginning inventory 20,500 8,480 10,400 Budgeted purchaes 2,980 28,420 33,300

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