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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 27,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:

January 11,700
February 17,300
March 13,000
April 13,500
May 10,200
June 6,900


Required:

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

Please show work.

Business   Accounting   
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Answer #1

Ans:

Month January February March April May June
1 Estimated sales 11700 17300 13000 13500 10200 6900
2 Beginnig inventory 27000 28500 25500
3 Ending inventory (next 3 month sales) 43800 36700 30600
4 Purchase for the month(1+3-2) 28500 25500 18100
5 Total cost = 4*1$ 28500 25500 18100
January February March
Purchase in unit 28500 25500 18100
Cash Required to Purchase 28500 25500 18100


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