Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

Question

Quizplus · Accepted Answer

Budgeted purchases of inventory (in units) = Budgeted sales(in units) + Desired ending inventory (in units) - Beginning inventory (in units)
Budgeted purchases of inventory in February (in units) = (50,000 × 104%) + 10,000 units - 10,000 units = 52,000 units

Sales for January Are Budgeted at 50,000 Units, and the Company