Question
In: Accounting
Garfield Corp. expects to sell 1,400 units of its pet beds in March and 900 units...
Garfield Corp. expects to sell 1,400 units of its pet beds in March and 900 units in April. Each unit sells for $150. Garfield’s ending inventory policy is 20 percent of the following month’s sales. Garfield pays its supplier $40 per unit.
Compute Garfield's budgeted purchases for March.
Solutions
Expert Solution
| Expected sales for March | 1400 | |
| Add: Desired ending inventory | 180 | =900*20% |
| Less: Beginning inventory | -280 | =1400*20% |
| Required purchases | 1300 | |
| X Cost per unit | 40 | |
| Budgeted purchases for March | 52000 |
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