Keggler's Supply is a merchandiser of three different products. The company's February 28 Inventories are footwear, 19,000 units; sports equipment, 81,500 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 29% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. June Budgeted Sales in Units March April May 15,000 24,500 31,000 34,500 71,500 88,000 95,000 89,500 40,500 37,500 33,000 24,000 FOOTWEAR Budgeted sales for next month Ratio of ending inventory to future sales Required units of available merchandise KEGGLER'S SUPPLY Merchandise Purchases Budget For March, April, and May March Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Budgeted purchases Required units of available merchandise APPAREL Budgeted sales for next month Ratio of ending inventory to future sales Budgeted purchases Required units of available merchandise April May
Keggler's Supply is a merchandiser of three different products. The company's February 28 Inventories are footwear, 19,000 units; sports equipment, 81,500 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 29% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. June Budgeted Sales in Units March April May 15,000 24,500 31,000 34,500 71,500 88,000 95,000 89,500 40,500 37,500 33,000 24,000 FOOTWEAR Budgeted sales for next month Ratio of ending inventory to future sales Required units of available merchandise KEGGLER'S SUPPLY Merchandise Purchases Budget For March, April, and May March Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Budgeted purchases Required units of available merchandise APPAREL Budgeted sales for next month Ratio of ending inventory to future sales Budgeted purchases Required units of available merchandise April May
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 19,000 units,
sports equipment, 81,500 units; and apparel, 49,000 units. Management belleves 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.
Footwear
Sports equipment
Apparel
Required:
1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May.
Budgeted Sales in Units
March April May
15,000 24,500 31,000
71,500 88,000 95,000
40,500 37,500 33,000 24,000
FOOTWEAR
Budgeted sales for next month
Ratio of ending inventory to future sales
Required units of available merchandise
Budgeted purchases
SPORTS EQUIPMENT
Budgeted sales for next month
Ratio of ending inventory to future sales
Budgeted purchases
APPAREL
Merchandise Purchases Budget
For March, April, and May
March
Required units of available merchandise
KEGGLER'S SUPPLY
Budgeted sales for next month
Ratio of ending inventory to future sales
Budgeted purchases
June
34,500
89,500
Required units of available merchandise
April
May
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