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Lexi Company budgets unit sales of 1,440,000 in April, 1,210,000 in May, 680,000 in June, and 1,070,000 in July. Beginning inventory on April 1 is
Lexi Company budgets unit sales of 1,440,000 in April, 1,210,000 in May, 680,000 in June, and 1,070,000 in July. Beginning inventory on April 1 is 432,000 units, and the company wants to have 30% of next month's unit sales in inventory at the end of each month. The merchandise cost per unit is $0.50. Prepare a merchandise purchases budget for the months of April, May, and June. Budgeted sales units LEXI COMPANY Merchandise Purchases Budget April May June 1,444,000 1,210,000 680,000 Add: Desired ending inventory Next period budgeted sales units 1,210,000 680,000 1,070,000 Total required units Ratio of inventory to future sales Desired ending inventory units Less: Beginning inventory units 30% 363,000 30% 204,000 30% 321,000 1,807,000 1,414,000 1,001,000 Units to purchase Cost per unit $ Cost of merchandise purchases $ 0.50 $ 0 $ 0.50 $ 0 $ 0.50 0
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