Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months sales. The tiles cost $1.25 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:

January 11,900

February 18,700

March 13,600

April 14,700

May 10,300

June 7,100

Required: a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March.

MIDLAND COMPANY

Merchandise Purchases Budget

For the Period Ended March 31 (in units)

January February March

Units to be purchased

Estimated cost