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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
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 20,000 units. The company budgets sales of 200,000 units in October. The merchandise cost per unit is $3. Budgeted sales units Units to purchase July 200,000 209,000 August September 290,000 290,000 290,000 281,000 Prepare the merchandise purchases budgets for the months of July, August, and September. WALKER COMPANY Merchandise Purchases Budget July August September Next period budgeted sales units Ratio of inventory to future sales 0 0 0 Total required units Units to purchase Cost per unit Cost of merchandise purchases
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