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?
A) 52,000 units
B) 54,000 units
C) 62,000 units
D) None of the above answers are correct.

Question

Quizplus · Accepted Answer

Budgeted purchases of inventory purchases (in units)= Budgeted cost of goods sold (in units)+ Desired ending inventory (in units)- Beginning inventory (in units)
Budgeted purchases of inventory purchases in February (in units)= (50,000 x 104%)+ 10,000 units - 10,000 units = 52,000 units

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