Next years sales forecast shows that 20000 units of Product

Next year\'s sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. Budgeted purchases of Product A for the year would be: Select one: a. 22,400 units. b. 20,400 units. c. 20,000 units. d. 19,500 units. e. 12,200 units.

Solution

ending inventory = 2000+(2000*20%)

ans: option b 20400