Question

Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It...

Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $1.00 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:

January

12,900

February

17,400

March

13,800

April

14,800

May

8,800

June

6,900


Required:

a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March.

Midland Company

Merchandise Purchases Budget

For the Period Ended March 31

in Units

January

February

March

Units to be purchased

30900

Estimated Cost

30900
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