Heedy Company is trying to decide how many units of merchandise to order each month. The company policy is to have 20% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 30,000 units, 20,000 units, and 40,000 units, respectively. How many units must be purchased in September?
A) 24,000
B) 18,000
C) 28,000
D) 22,000

Question

Quizplus · Accepted Answer

To have 20% of the next month's sales in inventory at the end of September, Heedy Company must have 20% of October's sales in inventory at the end of September. 20% of 40,000 units is 8,000 units. Since Heedy Company already has 30,000 units in inventory at the end of August, it must purchase 8,000 units in September to have 20% of October's sales in inventory at the end of September.

Heedy Company Is Trying to Decide How Many Units of Merchandise