Problem 22-5AA (Algo) Merchandising: Preparation of merchandise purchases budgets for three products LO P4 Keggler's Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 21,000 units, sports gear, 82000 units, and apparel, 49,500 units. Management believes each of these inventories is too high and begins a new policy that ending inventory in any month should equal 31% 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 14,000 23,500 33,500 37,000 71,000 90,500 96,000 91,000 40,500 39,000 33,500 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 14,000 23,500 > 33,500 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 X X X X 0 14,000 23,500 33,500 X X x X Desired ending Inventory Total required units 14,000 23,500 33,500 x x Units to purchase x SPORTS GEAR 71,000 90,500 96,000 Budgeted sales units Add: Desired ending inventory Next period budgeted sales units x Ratio of ending inventory to future sales XXX Total required units x X Units to purchase APPAREL x x X X Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Desired ending inventory Total required units > Add: Beginning inventory units x XX XX Units to purchase ht ni AFP intended