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 of 1,000 units.Budgeted purchases in April would be:
A)5,000 units.
B)6,000 units.
C)5,300 units.
D)6,300 units.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The desired ending inventory is 30% higher than the beginning inventory of 1,000 units, so the desired ending inventory is 1,300 units. The budgeted sales are 5,000 units, so the budgeted purchases would be 5,000 units + 1,300 units - 1,000 units = 5,300 units.

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