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Problem 20-5AA Merchandising: Preparation and analysis of purchases budgets LO P4 Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories
Problem 20-5AA Merchandising: Preparation and analysis of purchases budgets LO P4 Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 20,500 units; sports equipment, 81,500 units; and apparel, 49,000 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 29% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel Budgeted sales in Units March April May June 15,000 25,500 31,500 34,500 71,000 88,500 95,000 91,000 41,000 38,000 33,500 23,000 Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. KEGGLER'S SUPPLY Merchandise Purchases Budget For March, April, and May March April May FOOTWEAR 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 Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Ratio of ending inventory to future sales Required units of available merchandise Budgeted purchases APPAREL Budgeted sales for next month Ratio of ending inventory to future sales Required units of available merchandise Budgeted purchases
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