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S 22-29A (Algo) Merchandising: Merchandise purchases budget LO P4 Lexi Company budgets unit sales of 1,720,000 in April, 1,280,000 in May, 850,000 in June, and
S 22-29A (Algo) Merchandising: Merchandise purchases budget LO P4 Lexi Company budgets unit sales of 1,720,000 in April, 1,280,000 in May, 850,000 in June, and 1,730,000 in July. Beginning inventory on April 1 is 516,000 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. LEXI COMPANY Merchandise Purchases Budget April May June Budgeted sales units Add: Desired ending inventory 1,720,000 1,280,000 850,000 Next period budgeted sales units 1,260,000 310,000 1,110 Ratio of inventory to future sales Desired ending inventory units Total required units 30% 378,000 2,098,000 30% 30% 93,000 1,353,000 Less: Beginning inventory units 516,000 378,000 Units to purchase 1,582,000 975,000 Cost per unit $ 0.50 $ 0.50 $ 0.50 Cost of merchandise purchases $ 791,000 $ 487,500 $ 0 Che
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