1 On September 30 of Year 1, Julian Company had inventory of 2,000 units. Starting in October, Julian intends to have an inventory policy of maintaining ending inventory at the end of every month equal to the next months sales. For example, ending inventory at the end of October should be equal to forecasted sales in November. Forecasted sales for the months October, Year 1 through January, Year 2 are as follows. October 4,500 units November 6,000 units December 2,000 units January 1,000 units What is the amount of budgeted inventory PURCHASES for OCTOBER?

Answer

10500 units; 6000 units; 8500 units; 4000 units

2 On September 30 of Year 1, Jay Company had inventory of 2,000 units. Starting in October, Jay intends to have an inventory policy of maintaining ending inventory at the end of every month equal to the next months sales. For example, ending inventory at the end of October should be equal to forecasted sales in November.

Forecasted sales for the months October, Year 1 through January, Year 2 are as follows.

October	4,500 units
November	6,000 units
December	2,000 units
January	1,000 units

What is the amount of budgeted inventory PURCHASES for DECEMBER?

• 10,500 units
• 4,000 units
• 3,000 units
• 1,000 units

3 On September 30 of Year 1, Lily Company had finished goods inventory of 2,000 units. Starting in October, Lily intends to have an inventory policy of maintaining ending inventory at the end of every month equal to the next TWO months sales. For example, ending inventory at the end of October should be equal to forecasted sales in November plus forecasted sales in December.

Forecasted sales for the months October, Year 1 through January, Year 2 are as follows.

October	4,500 units
November	6,000 units
December	2,000 units
January	1,000 units

What is the amount of budgeted PRODUCTION for November? (Note that this question is asking about November, not October.)

• 3,300 units
• 2,000 units
• 4,700 units
• 1,000 units