question 6

Walker Company prepares monthly budgets. Company policy is to end each month with merchandise Inventory equal to 15% of budgeted unit sales for the following month. Budgeted sales and merchandise purchases for the next three months follow. Beginning Inventory on July 1 Is 30,000 units. The company budgets sales of 220,000 units In October. The merchandise cost per unit is $3. September 270,000 262,500 Prepare the merchandise purchases budgets for the months of July, August, and September. Budgeted sales units Units to purchase Next period budgeted sales units Ratio of inventory to future sales Total required units Units to purchase Cost per unit Cost of merchandise purchases July 200,000 215,000 August 300,000 295,500 WALKER COMPANY Merchandise Purchases Budget July August September