Formworks Company prepares monthly budgets. The current budget plans for a September ending inventory of 15,000 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the three most recent months follow.

Prepare the merchandise purchases budget for the months of July, August, and September

Compute the ratio of ending inventory to the next months sales for each budget prepared in part 1.

How many units are budgeted for sale in October

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July sales 120000 purchases 138000

Aug sales 210000 purchases 204000

Sept sales 180000 purchases 159000