FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
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 | |
Footwear | 15,000 | 25,000 | 32,000 | 35,000 |
Sports equipment | 70,000 | 90,000 | 95,000 | 90,000 |
Apparel | 40,000 | 38,000 | 37,000 | 25,000 |
1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The trailer company exspects to sell 9000 for $155 each for a total of $1,395,000 in January and 4500 units for $225 each for a total of $1,012,500 in February. The company exspects the cost of goods sold to average 70% of sales revenue, and the company exspects to sell 4700 units in march for $290 each. Trailer's target ending inventory is $9000 plus 50% of next months cost of goods sold. Prepare Trailer's inventory, purchases, and cost of goods sold budget for January and February. Trailer Company Inventory, Purchases, and Cost of Goods Sold Budget Two months Ended January 31 and February 28 January february cost of goods sold Plus: Desired ending merchandise inventory Total merchandise inventory required Less: Beginning merchandise inventory Budgeted purchasesarrow_forwardKeggler'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…arrow_forwardManjiarrow_forward
- Yorkley Corporation plans to sell 41,000 units of its single product in March. The company has 2,800 units in its March 1 finished-goods inventory and anticipates having 2,400 completed units in inventory on March 31. On the basis of this information, how many units does Yorkley plan to produce during March?arrow_forwardkeep costs down, CGC maintains a warehouse but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: 1. Expected monthly sales for April, May, June, and July are $180,000, $150,000, $270,000, and $50,000, respectively. 2. Cost of goods sold is 45 percent of expected sales. 3. CGC's desired ending inventory is 55 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: . Salaries: $33,000. ° Delivery expense: 8 percent of monthly sales. • Rent expense on the warehouse: $2,500. • Utilities: $500. • Insurance: $330. • Other expenses: $430. Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the budgeted cost of purchases for each month in the second quarter. Total Cost of…arrow_forwardSantorini Corporation has experienced a number of out of stock situations with respect to its finished goods inventories Inventory at the end of May, for example, was only 545 units an all time low Management desires to implement a policy whereby finished goods inventory is 60 % of the following month's sales Budgeted sales for June, and July are expected to be 3200 units, and 4400 units respectively Required Determine the number of units that Santorini must produce in June.arrow_forward
- One Device makes universal remote controls and expects to sell 654 units in January, 952 in February, 907 in March, 648 in April, and 957 in May. The required ending inventory is 13% of the next month’s sales. Calculate the total production for the first four months (January, February, March and April). Round to the nearest hundreth, two decimal places.arrow_forwardNarai Co. has a desired ending inventory of 30% of the next months forecasted sales. In turn, their cost of goods sold is 60%, and their forecasted sales for the months of March, April, May, June, and July are as follows: $750,000, $880,000, $700,000, $800,000, and $900,000 respectively. Purchases for the months of February and March were $500,000 and $360,000 and their purchases are paid as follows: 10% during the month of the purchase 80% in the next month and the final 10% in the next month. Required: Prepare budget schedules for the months of April, May, and June for required purchases and also for disbursements for purchases.arrow_forwardCherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 522,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 544,000 units, and, in year 2, it expects to sell 648,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 13,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 19,250 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month’s sales requirements. Sales and production take place evenly throughout the year. Required: a. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. (540,000 units for a is incorrect…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education