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Kegglers Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 19,500 units; sports gear, 79,500 units; and apparel, 50,000 units.

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Kegglers Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 19,500 units; sports gear, 79,500 units; and apparel, 50,000 units. Management believes each of these inventories is too high and begins a new policy that ending inventory in any month should equal 30% of the budgeted sales units for the following month. Budgeted sales units for March, April, May, and June follow. Footwear Sports gear Apparel Budgeted sales in Units March April May June 15,500 26,000 30,000 36,000 68,500 91,000 95,500 89,500 41,500 37,500 32,500 22,000 Required: 1. Prepare a merchandise purchases budget (in units only) for each product for each of the months of March, April, and May. KEGGLER'S SUPPLY Merchandise Purchases Budget March April May FOOTWEAR 26,000 30,000 36,000 15,500 26,000 30,000 30% 30% 30% 4,650 7,800 9,000 30,650 37,800 45,000 7,800 Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Desired ending inventory Total required units Less: Beginning inventory units Units to purchase SPORTS GEAR Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Desired ending inventory 19,500 11,150 4,650 33,150 37,200 91,000 95,500 89,500 68,500 91,000 95,500 30% 30% 30% 27,300 27,300 28,650 118,300 122,800 118,150 Total required units Less: Beginning inventory units Units to purchase 79,500 27,300 27,300 38,800 95,500 90,850 APPAREL 37,500 32,500 22,000 Budgeted sales units Add: Desired ending inventory Next period budgeted sales units 41,500 37,500 32,500 30% 30% 30% Ratio of ending inventory to future sales Desired ending inventory 12,450 11,250 9,750 Total required units 49,950 43,750 31,750 Less: Beginning inventory units 50,000 12,450 11,250 Units to purchase (50) 31,300 20,500

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