Rizzo Corporation had 17,000 units of brake calipers on hand at the end of 2012.The company's inventory policy was to maintain an ending inventory equal to 15% of the current year's sales.During 2012,Rizzo sold 210,000 units of calipers.How many units did Rizzo purchase in 2012?

Question

Quizplus · Accepted Answer

Rizzo's ending inventory should be 15% of the current year's sales, which is 210,000 * 0.15 = 31,500 units. Since Rizzo had 17,000 units on hand at the end of 2012, the company must have purchased 31,500 - 17,000 = 14,500 units during the year.

Rizzo Corporation Had 17,000 Units of Brake Calipers on Hand