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Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 20,000 units, sports equipment. 79,500 units; and apparel, 49,500
Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 20,000 units, sports equipment. 79,500 units; and apparel, 49,500 units. Management believes each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 28% of the expected unit sales for the following month. Expected sales in units for March April May, and June follow. Budgeted Sales in Units March April May Footwear 15,000 24,000 33,500 33,500 Sports equipment 69,000 90, 000 94,500 91,000 Apparel 41,500 38,000 32,500 23,000 June Required: 1. Prepare a merchandise purchases budget lin units) for each product for each of the months of March, April, and May, May 33,500 30% KEGGLER'S SUPPLY Merchandise Purchases Budget For March, April, and May March April FOOTWEAR Budgeted sales for next month 24,000 33.500 Ratio of ending Inventory to 30% 30% future sales Budgeted ending inventory Budgeted units sales for month Required units of available merchandise Actual (or estimated) beginning inventory Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Budgeted ending Inventory Budgeted units sales for month Required units of available merchandise Actual (or estimated) beginning inventory Budgeted purchases APPAREL Budgeted sales for next month Ratio of ending Inventory to future sales Budgeted ending inventory Budgeted units sales for month Required units of available merchandise
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