Keggler’s Supply is a merchandiser of three different products. The company’s Fe

Question

Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 19,500 units; sports equipment, 82,000 units; and apparel, 48,500 units. Management believes that excessive inventories have accumulated for all three products. As a result, a new policy dictates that ending inventory in any month should equal 30% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow.

  

  

Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May.

     

Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 19,500 units; sports equipment, 82,000 units; and apparel, 48,500 units. Management believes that excessive inventories have accumulated for all three products. As a result, a new policy dictates that ending inventory in any month should equal 30% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow.

Explanation / Answer

Purchase budget of footwear

Purchases budget for Sports equipment

Purchases budget for Apparel

Particulars March April May Sale 15,500 24,000 32,000 Closing Stock 30% of sale of next month 7,200 9,600 10,500 Opening Stock -19,500 -7,200 -9,600 Purchases 3,200 26,400 32,900

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