A department store has budgeted sales of 12,000 men's suits in September. Management wants to have 6,000 suits in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,000 suits. What is the dollar amount of the purchase of suits? Each suit has a cost of $75.

Question

Quizplus · Accepted Answer

First, we need to find the total number of suits needed for the store to have 6,000 suits in inventory at the end of September:

Total suits needed = Budgeted sales + desired ending inventory - beginning inventory

Total suits needed = 12,000 + 6,000 - 4,000 = 14,000

Next, we can find the dollar amount of the purchase of suits by multiplying the total number of suits needed by the cost per suit:

Dollar amount of purchase = Total suits needed x Cost per suit

Dollar amount of purchase = 14,000 x $75 = $1,050,000

Therefore, the answer is choice C, $1,050,000.

A Department Store Has Budgeted Sales of 12,000 Men's Suits