Given the sixmonth merchandise budget below answer questions

Given the six-month merchandise budget below, answer questions #5-8.  When completing the budget, do not round to the nearest whole dollar (in other words, do not drop the cents).

7. What is the “Total $ Planned Purchases at Retail” figure?

Last Year’s Total Sales = $790,000

Planned % Sales Increase = 6%

Planned % Reductions = 18%

Planned EOM for Period = $196,500

Planned IMU%= 55%

                                                               

Six-Month Merchandise Budget

Fall/Winter

August

September

October

November

December

January

Totals

Planned Sales

Planned Sales %    

12%

14%

22%

22%

16%

14%

100%  

Planned BOM Stock

____________

Planned S/S Ratio

2.0

2.3

2.8

2.5

2.5

2.0

____________

Planned EOM Stock

____________

Planned Reductions

Planned Reductions %

16%

17%

18%

17%

15%

17%

100%  

Planned Purchases @ Retail

Planned Purchases @ Cost

$939,100

$442,645.20

$1,384,660

$983,656

Planned Purchases at Retail= Sales + Reductions + EOM – Planned BOM

Planned BOM Inventory= Planned Monthly Sales x Planned Monthly Stock-to-Sales Ratio

Six-Month Merchandise Budget
Fall/Winter	August	September	October	November	December	January	Totals
Planned Sales
Planned Sales %	12%	14%	22%	22%	16%	14%	100%
Planned BOM Stock							____________
Planned S/S Ratio	2.0	2.3	2.8	2.5	2.5	2.0	____________
Planned EOM Stock							____________
Planned Reductions
Planned Reductions %	16%	17%	18%	17%	15%	17%	100%
Planned Purchases @ Retail
Planned Purchases @ Cost

Solution

Solution:

I have explained the work done in the below excel.

Fall/Winter	Work Done and calculation	August	September	October	November	December	January	Totals
Planned Sales	6% increase in sales = 790,000 *1.06 = 837,400 and each month the percentage is provided.	100488	117236	184228	184228	133984	117236	837400
Planned Sales %	Percentage of sales each month	12%	14%	22%	22%	16%	14%	100%
Planned BOM Stock	BOM stock= Planned monthly * Planned monthly stock to sales ratio	200976	269643	515838	460570	334960	234472	2016459
Planned S/S Ratio	Stock to sales ratio	2	2.3	2.8	2.5	2.5	2
Planned EOM Stock	Total EOM stock given = 196500 * with the percentage of increase in sales	23580	27510	43230	43230	31440	27510	196500
Planned Reductions	Planned total reduction is given at 18%= 196500*.82	25780.8	27392.1	29003.4	27392.1	24169.5	27392.1	161130
Planned Reductions %	Reduction percentage monthly	16%	17%	18%	17%	15%	17%	100%
Planned Purchases @ Retail	Purchase @ retail = Sales +Reductions +EOM - Planned BOM	-51127	-97505	-259377	-205720	-145367	-62334	-821429.2