Fairway\'s April sales forecast projects that 69,000 units will sell at a price

Question

Fairway's April sales forecast projects that 69,000 units will sell at a price of $10.50 per unit. The desired ending inventory is 30% higher than the beginning inventory, which was 2,130 units. Budgeted purchases of units in April would be:

Some other amount

a. 69,639 units

b. 71,769 units

c. 71,130 units

d. 69,000 units

Fairway's April sales forecast projects that 69,000 units will sell at a price of $10.50 per unit. The desired ending inventory is 30% higher than the beginning inventory, which was 2,130 units. Budgeted purchases of units in April would be:

Explanation / Answer

a)69639

Purchase = budgeted sales+ending inventory-opening inventory

*)budgeted sales =69000

*)ending inventory=2130

*)opening inventory =2130-30%

=2130×30%=639

=2130-639=1491

so purchase = 69000+2130-1491=69639

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