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 $9 and $11, respectively. The desired ending inventory of Product A is 22% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,750 units. The desired ending inventory of B is 3,250 units. Budgeted purchases of Product A for the year would be:

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 $9 and $11, respectively. The desired ending inventory of Product A is 22% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,750 units. The desired ending inventory of B is 3,250 units. Budgeted purchases of Product A for the year would be:

Explanation / Answer

a) 20440 units

op stock + pur - closing stock = sales

op stock = 2000

cl stck = 2000*122% = 2440

sales = 20000

pur = 20000+2440-2000

=20440 units

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