Vergados Brothers is trying to estimate the amount of inventory it needs to purchase next month (April). The controller likes to have twice the number of units he expects to sell on hand at the beginning of the month. He always takes the 3/10, net 30 purchase discount on the inventory purchases. Inventory costs $10 per unit. Actual sales for January and February, and the forecast sales for March to June, are as follows:

Cash payments for purchases are as follows: two thirds in the month of purchase; one third in the next month. The selling price is $20 per unit, and sales occur evenly throughout the month.
Instructions
(a) Calculate the number of units to be purchased in April.
(b) Calculate the amount of cash that Vergados Brothers will disburse in April for purchases.

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January February March Units 11,000 10,000 13,000 Units 14,000 15,000 13,000 April May une