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Walker Company prepares monthly budgets. Company policy is to end each month with merchandise inventory equal to 10% of budgeted unit sales for the following
Walker Company prepares monthly budgets. Company policy is to end each month with merchandise inventory equal to 10% 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 16,000 units. The company budgets sales of 190,000 units in October. The merchandise cost per unit is $3. Budgeted sales units July 160,000 August 290,000 September 290,000 Prepare the merchandise purchases budgets for the months of July, August, and September O September 290,000 WALKER COMPANY Merchandise Purchases Budget July August Budgeted sales units 160,000 290,000 Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Beginning inventory (units) Total required units Less: Beginning inventory units Units to purchase 0 Cost per unit Cost of merchandise purchases 0 0 0 0
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