Garcia Corporation's April sales forecast projects that 5,000 units will sell at a price of $10.50 per unit. The desired ending inventory is 30% higher than the beginning inventory, which was 1,000 units. Budgeted purchases of units in April would be:

Question

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The desired ending inventory is 30% higher than the beginning inventory, which was 1,000 units. So, the desired ending inventory is 1,000 * 1.30 = 1,300 units. The budgeted purchases of units in April would be the sales forecast plus the desired ending inventory minus the beginning inventory, which is 5,000 + 1,300 - 1,000 = 5,300 units.

Garcia Corporation's April Sales Forecast Projects That 5,000 Units Will