Question

33. Yamaguchi Swimwear has deve,oped the following sales budget, in units: January February March April May...

33.

Yamaguchi Swimwear has deve,oped the following sales budget, in units:

January February March April May
155,000 185,000 225,000 240,000 205,000

Beginning Inventory in January is 35,000 units. The company policy is to have 40% of the next month's inventory on hand at the end of the month.

Required:

Prepare a purchasing budget for the months of January - April. Do not include May.

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Answer #1

Answer:

Particulars January February March April
Sale units 155,000.00 185,000.00 225,000.00 240,000.00
Add: Closing inventory     74,000.00     90,000.00     96,000.00     82,000.00
Total requirement 229,000.00 275,000.00 321,000.00 322,000.00
Less: Opening inventory     35,000.00     74,000.00     90,000.00     96,000.00
Purchase requirement 194,000.00 201,000.00 231,000.00 226,000.00

Note:

Ending inventory is calculated as 40% of next month sales.

Ending inventory of April = 205,000 * 40% = 82,000 units.

Opening inventory of the month = CLosing inventory of last month.

In case of any doubt, please comment.

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