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A company budgets unit sales of 750 in January, 830 in February, 890 in March, and 730 in April. The company wants to have 30%
A company budgets unit sales of 750 in January, 830 in February, 890 in March, and 730 in April. The company wants to have 30% of next month's unit sales in inventory at the end of each month. Beginning inventory on January 1 is 225 units. The merchandise cost is $5 per unit. Prepare a merchandise purchases budget for the months of January, February, and March. Merchandise Purchases Budget Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to purchase Cost per unit Cost of merchandise purchases January $ 750 830 30% 225 February 5 $ $ 830 890 30% 50 $ $ March 890 30% 5 0
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