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Preparation and analysis of merchandise purchases budgets

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Question;Problem 7-1A: Preparation and analysis of merchandise purchases budgets Kegler's Supply is a merchandiser of three different products. The company's February 28 inventories arefootwear, 20,000 units, sports equipment, 80,000 units, and apparel, 50,000 units. Management believes thatexcessive inventories have accumulated for all three products. As a result, a new policy dictates that endinginventory in any month should equal 30% of the expected unit sales for the following month. Expected sales inunits for March, April, May, and June follow.Budgeted Sales in UnitsMarch April May JuneFootwear 15,000 25,000 32,000 35,000Sports equipment 70,000 90,000 95,000 90,000Apparel 40,000 38,000 37,000 25,000Required:Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, andMay. (Omit the "%" sign, which is provided for you. Amounts in parentheses does not require a minussign.)KEGLER'S SUPPLYMerchandise Purchases BudgetsFor March, April, and MayMarch April MayFootwearBudgeted sales for next monthRatio of ending inventory to future sales % % %Required units of available merchandise() () ()Sports equipmentBudgeted sales for next monthRatio of ending inventory to future sales % % %Required units of available merchandise() () ()ApparelBudgeted sales for next monthRatio of ending inventory to future sales % % %Required units of available merchandise() () ()

 

Paper#49504 | Written in 18-Jul-2015

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