Homework SourseRetail Company has the following budgeted quarterly sales fo
Retail Company has the following budgeted quarterly sales for the next year. 1st QTR - 3,000 units; 2nd QTR - 4,000 units; 3rd QTR - 3,600 units; 4th QTR - 5,600 units.
Each unit sells for $10.
Beginning finished goods inventory for the 1st quarter was 500 units. The company wants to end each quarter with 25% of the sales for the next quarter.
Calculate budgeted purchases (in units) for the second quarter.
Solution
Calculate budgeted purchase for the second quarter :
| Second quarter | |
| Sales (units) | 4000 |
| Add: Desired ending inventory (3600*25%) | 900 |
| Total | 4900 |
| Less: Beginning inventory (4000*25%) | -1000 |
| Budgeted purchase (units) | 3900 |
