Westile Company buys plain ceramic tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $2 each and must be paid for in cash. The company has 56,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:
January . . . . . . . . . . . . . . . . . . . . . . . . . 24,800
February . . . . . . . . . . . . . . . . . . . . . . . . 35,600
March . . . . . . . . . . . . . . . . . . . . . . . . . . 26,400
April . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,400
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,200
June. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,400
Required
a. Estimate purchases (in units) for January, February, and March.
b. Estimate cash required to make purchases in January, February, and March.