The sales budget for Astra Awards Company shows budgeted sales (in awards) for December and the first
Question:
The sales budget for Astra Awards Company shows budgeted sales (in awards) for December and the first four months of next year:
Required:
Prepare a budget for the number of awards Astra needs to purchase in the first three months of next year for each of the following two independent situations:
a The business' policy is to have inventory on hand at the end of each month equal to 20 per cent of the following month's sales requirement.
b The business' policy is to keep each month's ending inventory to a minimum without letting it fall below 10000 awards. Assume that the 1 December inventory has 10000 awards and that the business' only supplier is willing to sell a maximum of 130000 awards to the business per month.
Step by Step Answer:
Accounting Information For Business Decisions
ISBN: 9780170253703
2nd Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley, Marie Kavanagh, Geoff Slaughter, Sharelle Simmons