The sales budget for Carmel shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. Budgeted purchases of Product B for the year would be:

Question

Quizplus · Accepted Answer

To calculate the budgeted purchases of Product B, we need to consider the sales, beginning inventory, and desired ending inventory. The formula to calculate budgeted purchases is: Budgeted Purchases = Sales + Desired Ending Inventory - Beginning Inventory. For Product B, this is 22,000 (sales) + 3,000 (desired ending inventory) - 2,500 (beginning inventory) = 22,500 units.

The Sales Budget for Carmel Shows That 20,000 Units of Product