Joe's Mart policy is to have 20% of the next month's sales on hand at the end of the current month. Projected sales for August, September, and October are 25,000 units, 20,000 units, and 30,000 units, respectively. How many units must be purchased in September?

Question

Quizplus · Accepted Answer

To determine how much to purchase in September, we need to find out how much of the inventory is carried over from August to September, and then subtract that amount from the sales projected for September.

20% of 25,000 (August sales) = 5,000 units to be carried over from August to September.
Total units available for sale in September = 25,000 (September sales projection) + 5,000 (August carryover) = 30,000 units.

We need to have 20% of 20,000 (October sales projection) = 4,000 units on hand at the end of September.

Therefore, the number of units that must be purchased in September = 30,000 (total units available for sale in September) - 4,000 (units to be on hand at end of September) = 26,000 units.

So, the answer is (D) 26,000.

Joe's Mart Policy Is to Have 20% of the Next