Question

Pinsetter’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 18,000 units; sports equipment, 78,000 units; and apparel, 48,000 units. Management believes that excessive inventories have accumulated for all three products. As a result, a new policy dictates that ending inventory in any month should equal 31% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow.

  

	Budgeted Sales in Units
	March	April	May	June
Footwear	15,500	24,000	32,500	35,000
Sports equipment	69,500	90,000	95,000	89,500
Apparel	41,000	38,500	33,000	23,000

  

Required:

1.	Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. (Amounts to be deducted should be indicated with a minus sign. Omit the "%" sign in your response.)

  

PINSETTER’S SUPPLY Merchandise Purchases Budgets For March, April, and May
	March	April	May
FOOTWEAR
Budgeted sales for next month
Ratio of ending inventory to future sales	%	%	%
(Click to select)Budgeted beginning inventoryBudgeted purchasesBudgeted ending inventoryBudgeted merchandise inventoryBudgeted sales
(Click to select)Less: Budgeted salesAdd: Budgeted salesAdd: Budgeted purchasesLess: Budgeted purchasesBudgeted beginning inventory
Required units of available merchandise
(Click to select)Add: Actual (or budgeted) ending inventoryLess: Actual (or budgeted) beginning inventoryBudgeted salesAdd: Actual (or budgeted) beginning inventoryLess: Actual (or budgeted) ending inventory
Budgeted purchases
SPORTS EQUIPMENT
Budgeted sales for next month
Ratio of ending inventory to future sales	%	%	%
(Click to select)Budgeted ending inventoryBudgeted salesBudgeted beginning inventoryBudgeted merchandise purchasesBudgeted purchases
(Click to select)Add: Budgeted salesBudgeted beginning inventoryAdd: Budgeted purchasesLess: Budgeted salesLess: Budgeted purchases
Required units of available merchandise
(Click to select)Less: Actual (or budgeted) ending inventoryBudgeted salesAdd: Actual (or budgeted) ending inventoryAdd: Actual (or budgeted) beginning inventoryLess: Actual (or budgeted) beginning inventory
Budgeted purchases
APPAREL
Budgeted sales for next month
Ratio of ending inventory to future sales	%	%	%
(Click to select)Budgeted merchandise purchasesBudgeted ending inventoryBudgeted purchasesBudgeted salesBudgeted beginning inventory
(Click to select)Add: Budgeted purchasesAdd: Budgeted salesBudgeted beginning inventoryLess: Budgeted salesLess: Budgeted purchases

Answer 1

	PINSETTER’S SUPPLY
	Merchandise Purchases Budgets
	For March, April, and May
	March	April	May
FOOTWEAR
Budgeted sales for next month	24000	32500	35000
Ratio of ending inventory to future sales	31%	31%	31%
Budgeted ending inventory	7440	10075	10850
Add: Budgeted sales	15500	24000	32500
Required units of available merchandise	22940	34075	43350
Less: Actual (or budgeted) ending inventory	-18000	-7440	-10075
Budgeted purchases	4940	26635	33275
SPORTS EQUIPMENT
Budgeted sales for next month	90000	95000	89500
Ratio of ending inventory to future sales	31%	31%	31%
Budgeted ending inventory	27900	29450	27745
Add: Budgeted sales	69500	90000	95000
Required units of available merchandise	97400	119450	122745
Less: Actual (or budgeted) ending inventory	-78000	-27900	-29450
Budgeted purchases	19400	91550	93295
APPAREL
Budgeted sales for next month	38500	33000	23000
Ratio of ending inventory to future sales	31%	31%	31%
Budgeted ending inventory	11935	10230	7130
Add: Budgeted sales	41000	38500	33000
Required units of available merchandise	52935	48730	40130
Less: Actual (or budgeted) ending inventory	-48000	-11935	-10230
Budgeted purchases	4935	36795	29900