Question

Schrank Company is trying to decide how many units of merchandise to order each month. The company's policy is to have 25% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 48,000 units, 38,000 units, and 58,000 units, respectively. How many units must be purchased in September

Answer 1

the number of units to be purchased in September is 43,000 units

Step-by-step explanation:

The computation of the number of units to be purchased in September is as follows:

= Sales units + ending inventory units - beginning inventory units

= 38,000 units + 58,000 units × 25% - 38,000 units × 25%

= 38,000 units + 14,500 units - 9,500 units

= 43,000 units

hence, the number of units to be purchased in September is 43,000 units

We simply applied the above formula so that the correct value could come

And, the same is to be considered