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Budgeting Swanson plans to sell 10,860 units of a particular product during July, and expects sales...

Budgeting Swanson plans to sell 10,860 units of a particular product during July, and expects sales to increase at the rate of 10% per month during the remainder of the year. The June and September 30 ending inventories are anticipated to be 947 units and 944 units, respectively. Required: On the basis of this information, how many units should Swanson purchase for the quarter ended September 30?

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Answer #1
Ans. Particulars Quarter 3
Expected units to be sold 35947
Add: Desired ending inventory units 944
Total required units 36891
Less: Beginning inventory units -947
Units to be purchased 35944
*WORKING NOTES :
*Calculations for units to be sold in July, August and September :
Months Unit sales
July 10,860
August (10,860 * 1.10) 11,946
September (11,946 * 1.10) 13,141
Total expected units to be sold in Quarter 3 35,947 (rounded)
*Ending inventory of June (second quarter) = Beginning inventory for third quarter.
*Ending inventory of September will be the ending inventory for third qurter.
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