Falcon Enterprises expects the following unit sales over the next five months:MonthUnit SalesApril400,000May480,000June540,000July600,000August560,000Falcon's goal is to maintain an inventory equal to 20% of next month's sales requirements. March 31 inventory is projected to be 70,000 units.Required:Prepare a purchases budget (in units) for Falcon for as many months as is possible based on data provided. Assume a 30-day month.
What will be an ideal response?
| April | May | June | July | August | |||||||||||
| Sales (units) | 400,000 | 480,000 | 540,000 | 600,000 | 560,000 | ||||||||||
| + Ending Inventory | 96,000 | 108,000 | 120,000 | 112,000 | |||||||||||
| - Beginning Inventory | (70,000) | (96,000) | (108,000) | (120,000) | |||||||||||
| Purchases | 426,000 | 492,000 | 552,000 | 592,000 | |||||||||||
Ending Inventories: April: 480,000 × 20% = 96,000; May: 540,000 × 20% = 108,000; June: 600,000 × 20% = 120,000; July: 560,000 × 20% = 112,000; August: cannot be determined.
Business
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