Keggler’s Supply is a merchandiser of three different products.
The company’s February 28 inventories are footwear, 21,000 units;
sports equipment, 81,000 units; and apparel, 49,000 units.
Management believes each of these inventories is too high. As a
result, a new policy dictates that ending inventory in any month
should equal 30% 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 | 15,000 | 26,000 | 32,500 | 36,500 |
Sports equipment | 71,000 | 91,000 | 96,000 | 89,500 |
Apparel | 41,000 | 37,000 | 32,000 | 24,000 |
Required:
1. Prepare a merchandise purchases budget (in
units) for each product for each of the months of March, April, and
May.
Solution:
Merchandise Purchases Budget (in Units) - FOOTWEAR |
||||
March |
April |
May |
June (for working) |
|
Budgeted Sales Units |
15000 |
26000 |
32500 |
36500 |
Plus: Expected Ending Inventory (30% of next months sales) |
7800 |
9750 |
10950 |
|
Total Needs |
22800 |
35750 |
43450 |
|
Less: Beginning Inventory |
21000 |
7800 |
9750 |
|
Merchandise Purchases Budget (in Units) - FOOTWEAR |
1800 |
27950 |
33700 |
Merchandise Purchases Budget (in Units) - Sports Equipment |
||||
March |
April |
May |
June (for working) |
|
Budgeted Sales Units |
71000 |
91000 |
96000 |
89500 |
Plus: Expected Ending Inventory (30% of next months sales) |
27300 |
28800 |
26850 |
|
Total Needs |
98300 |
119800 |
122850 |
|
Less: Beginning Inventory |
81000 |
27300 |
28800 |
|
Merchandise Purchases Budget (in Units) - Sports Equipment |
17300 |
92500 |
94050 |
Merchandise Purchases Budget (in Units) - Apparel |
||||
March |
April |
May |
June (for working) |
|
Budgeted Sales Units |
41000 |
37000 |
32000 |
24000 |
Plus: Expected Ending Inventory (30% of next months sales) |
11100 |
9600 |
7200 |
|
Total Needs |
52100 |
46600 |
39200 |
|
Less: Beginning Inventory |
49000 |
11100 |
9600 |
|
Merchandise Purchases Budget (in Units) - Apparel |
3100 |
35500 |
29600 |
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear,...
Keggler’s Supply is a merchandiser of three different products.
The company’s February 28 inventories are footwear, 19,500 units;
sports equipment, 80,500 units; and apparel, 49,500 units.
Management believes each of these inventories is too high. As a
result, a new policy dictates that ending inventory in any month
should equal 29% 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...
Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 20,000 units; sports equipment, 80,000 units; and apparel, 50,000 units. Management believes each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 30% 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...
Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear 20,500 units; sports equipment. 80,000 units and apparel, 49,500 units. Management believes each of these inventories is too high. As a result, a new policy dictates that ending Inventory in any month should equal 30% of the expected unit sales for the following month. Expected sales in units for March April May, and June Follow March 14.000 69.500 42,0 April 27.00 .000 18,500 May...
Problem 22-5AA Merchandising: Preparation and analysis of purchases budgets LO P4 Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 20,000 units; sports equipment, 80,000 units, and apparel, 50,000 units. Management believes each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 30% of the expected unit sales for the following month. Expected sales in units for March, April, May, and...
VROOM Inc. is a merchandiser that sells spa products to the hotel industry. (the company is not a manufacturer). Management is planning its cash needs for the second quarter April, May and June). The following information has been assembled to assist in preparing a cash budget for the second quarter: 1. Budgeted monthly income statements for April to July are as follows: Sale.000 300.00 April May June July Sales $470,000 $710,000 $410,000 $300,000 Cost of goods sold 336,000 504,000 280,000...
The president of the retailer Prime Products has just approached the company’s bank with a request for a $71,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which...
The president of the retailer Prime Products has just approached
the company’s bank with a request for a $71,000, 90-day loan. The
purpose of the loan is to assist the company in acquiring
inventories. Because the company has had some difficulty in paying
off its loans in the past, the loan officer has asked for a cash
budget to help determine whether the loan should be made. The
following data are available for the months April through June,
during which...
The president of the retailer Prime Products has just approached the company’s bank with a request for a $59,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which...
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 42,000 units on March 31, and it had accounts receivable totaling $83,500. Sales, in units, have been budgeted as follows for the next four months: April 55,000 May 65,000 June 81,000 July 79,000 To be enforced in April, Star Wars board of directors has established a policy that states that the inventory at the end of each month should contain 35% of the units required for...
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 42,000 units on March 31, and it had accounts receivable totaling $83,500. Sales, in units, have been budgeted as follows for the next four months: April 55,000 May 65,000 June 81,000 July 79,000 To be enforced in April, Star Wars board of directors has established a policy that states that the inventory at the end of each month should contain 35% of the units required for...