Serene Corporation, an auto parts retailer, had 17,000 units of brake calipers on hand at the end of 2019. The company's inventory policy is to maintain an ending inventory equal to 15% of the current year's sales. During 2020, Serene sold 210,000 units of calipers. How many units did Serene purchase in 2020?

Question

Quizplus · Accepted Answer

To find the number of units purchased in 2020, calculate the ending inventory for 2020, which is 15% of 210,000 (31,500 units). The beginning inventory was 17,000 units. The formula for purchases is: Purchases = Sales + Ending Inventory - Beginning Inventory. Thus, Purchases = 210,000 + 31,500 - 17,000 = 224,500 units.

Serene Corporation, an Auto Parts Retailer, Had 17,000 Units of Brake