Question
Kegglers Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 20,000 units; sports gear, 81,500 units; and apparel, 48,500 units.
Kegglers Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 20,000 units; sports gear, 81,500 units; and apparel, 48,500 units. Management believes each of these inventories is too high and begins a new policy that ending inventory in any month should equal 31% of the budgeted sales units for the following month. Budgeted sales units for March, April, May, and June follow. Budgeted Sales in Units March April May June Footwear 14,500 26,000 30,500 36,500 Sports gear 70,000 90,500 96,000 90,000 Apparel 41,500 38,000 33,500 23,000 Required: 1. Prepare a merchandise purchases budget (in units only) for each product for each of the months of March, April, and May.
KEGGLERS SUPPLY Merchandise Purchases Budget March April May FOOTWEAR Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales 0 Total required units Units to purchase SPORTS GEAR Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Total required units Units to purchase APPAREL Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Total required units Units to purchase
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