2. Budgeted sales of gloves for Perfect Fit Hands for the first six months of th
ID: 2478166 • Letter: 2
Question
2. Budgeted sales of gloves for Perfect Fit Hands for the first six months of the year 2014 are as follows:
Months Unit Sales January 700,000 February 820,000 March 760,000 April 720,000 May 1,280,000 June 1,500,000 The beginning inventory for 2014 is 210,000 units.
The budgeted inventory at the end of a month is 30 percent of units to be sold the following month. Purchase price per unit is $7 per unit.
Required: Prepare a purchases budget in units and dollars for each month, January through May.
Explanation / Answer
Solution:
Purchases Budget in Units January Feburary March Sales budgeted 700,000 820,000 760,000 Add: Ending Inventory 30 % of next months sales 246,000 228,000 216,000 Less: Beginning Inventory 210,000 246,000 228,000 Purchases requirement 736,000 802,000 748,000 Purchases Budget in Dollars January Feburary March Purchases requirement 736,000 802,000 748,000 Purchase price per unit 7 7 7 Purchases amount 5,152,000 5,614,000 5,236,000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.