(Learning Objective 4: Budgeting inventory purchases) Toys Plus prepares budgets to help manage the company. Toys Plus is budgeting for the fi scal year ended January 31, 20X6. During the preceding year ended January 31, 20X5, sales totaled $9,300 million and cost of goods sold was $6,500 million. At January 31, 20X5, inventory stood at $2,100 million.

During the upcoming 20X6 year, suppose Toys Plus expects cost of goods sold to increase by 10%. The company budgets next year’s ending inventory at $2,400 million.

❙ Requirement 1. One of the most important decisions a manager makes is how much inventory to buy.

How much inventory should Toys Plus purchase during the upcoming year to reach its budgeted fi gures?