Given the six-month merchandise budget below, answer questions #5-8. When comple

Question

Given the six-month merchandise budget below, answer questions #5-8.  When completing the budget, do not round to the nearest whole dollar (in other words, do not drop the cents).

7. What is the “Total $ Planned Purchases at Retail” figure?

Last Year’s Total Sales = $790,000

Planned % Sales Increase = 6%

Planned % Reductions = 18%

Planned EOM for Period = $196,500

Planned IMU%= 55%

                                                               

Six-Month Merchandise Budget

Fall/Winter

August

September

October

November

December

January

Totals

Planned Sales

Planned Sales %    

12%

14%

22%

22%

16%

14%

100%  

Planned BOM Stock

____________

Planned S/S Ratio

2.0

2.3

2.8

2.5

2.5

2.0

____________

Planned EOM Stock

____________

Planned Reductions

Planned Reductions %

16%

17%

18%

17%

15%

17%

100%  

Planned Purchases @ Retail

Planned Purchases @ Cost

$939,100

$442,645.20

$1,384,660

$983,656

Planned Purchases at Retail= Sales + Reductions + EOM – Planned BOM

Planned BOM Inventory= Planned Monthly Sales x Planned Monthly Stock-to-Sales Ratio

                                                               

Six-Month Merchandise Budget

Fall/Winter

August

September

October

November

December

January

Totals

Planned Sales

Planned Sales %    

12%

14%

22%

22%

16%

14%

100%  

Planned BOM Stock

____________

Planned S/S Ratio

2.0

2.3

2.8

2.5

2.5

2.0

____________

Planned EOM Stock

____________

Planned Reductions

Planned Reductions %

16%

17%

18%

17%

15%

17%

100%  

Planned Purchases @ Retail

Planned Purchases @ Cost

Explanation / Answer

Solution:

I have explained the work done in the below excel.

Fall/Winter Work Done and calculation August September October November December January Totals Planned Sales 6% increase in sales = 790,000 *1.06 = 837,400 and each month the percentage is provided. 100488 117236 184228 184228 133984 117236 837400 Planned Sales %     Percentage of sales each month 12% 14% 22% 22% 16% 14% 100%   Planned BOM Stock BOM stock= Planned monthly * Planned monthly stock to sales ratio 200976 269643 515838 460570 334960 234472 2016459 Planned S/S Ratio Stock to sales ratio 2 2.3 2.8 2.5 2.5 2 Planned EOM Stock Total EOM stock given = 196500 * with the percentage of increase in sales 23580 27510 43230 43230 31440 27510 196500 Planned Reductions Planned total reduction is given at 18%= 196500*.82 25780.8 27392.1 29003.4 27392.1 24169.5 27392.1 161130 Planned Reductions % Reduction percentage monthly 16% 17% 18% 17% 15% 17% 100%   Planned Purchases @ Retail Purchase @ retail = Sales +Reductions +EOM - Planned BOM -51127 -97505 -259377 -205720 -145367 -62334 -821429.2

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