Question

When preparing a merchandise purchases budget, the required purchases in units equals: Question 22 options: Budgeted...

When preparing a merchandise purchases budget, the required purchases in units equals:

Question 22 options:

Budgeted unit sales + beginning merchandise inventory + desired merchandise ending inventory

Budgeted unit sales - beginning merchandise inventory + desired merchandise ending inventory.

Budgeted unit sales - beginning merchandise inventory - desired merchandise ending inventory.

Budgeted unit sales + beginning merchandise inventory - desired merchandise ending inventory.
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Answer #1

Question 22:

Answer :

Required purchases in units = Budgeted unit sales - beginning merchandise inventory + desired merchandise ending inventory.

Because, the required purchases in units means the number of units that business wants to purchase for meeting the budgeted sales after keeping the required closing inventory. So the total units required should be equal to sum of budgeted sales units and closing inventory units.

However out of the total required units, if the opening inventory is existing then that quantity of merchandise need not to be purchased as they are already existing.

So to get required purchases in units opening inventory is deducted and closing inventory is added from budgeted sales units.

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