The Bag Corporation is a distributor of high end golf bags. In the past, The Bag Corporation produced and sold the golf bags. Over time, they realized it was cheaper to buy the golf bags fully assembled and resell them to the public, therefore eliminating their need for a manufacturing plant. The Bag Corporation pays $60 per golf bag and sells them for $180.

Prepare a 2021 Purchases Budget (for units and cost) for The Bag Corporation. They plan to have 5,000 golf bags on hand at December 31, 2020. The Bag Corporation purchases golf bags once a month and bases their purchase on 95% of the next months projected sales. (In December 2020, The Bag Corporation plans to sell 5,500 golf bags and will purchase 5,700 golf bags [January 2021 projected sales of 6,000 golf bags x 95%]. In January 2021, The Bag Corporation plans to sell 6,000 golf bags and will purchase 5,757 golf bags [February 2021 projected sales of 6,060 golf bags x 95%]).