5.00 points Midland Company buys tiles and prints different designs on them for

Question

5.00 points Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months' sales. The tiles cost $1.25 each and must be paid for in cash. The company has 29,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months January February March April May June 2,500 17.200 13,500 14,900 9.400 7.100 Required a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March MIDLAND C Merchandise Purchases Budget For the Period Ended March 31 (in units) January FebruaryMarch Units to be purchased Estimated cost

Explanation / Answer

Estimated Purchase For january = Estimated sales - Opening Stock

17200+13500+14900-29000 = 16600

Cost = 16600*1.25= $20750

Estimated purchases for Feb = 13500+14900+9400 = 37800

Cost = 37800*1.25= $47250

Estimated purchases for march = 14900+9400+7100= 31400

Cost = 31400*1.25= $ 39250

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