Question

A department store has budgeted sales of 12,000 men's suits in September. Management wants to have 6,000 suits in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,000 suits. What is the dollar amount of the purchase of suits if each suit has a cost of $75?

Answer 1

Beginning inventory 4,000 units

Sales 12,000 units

Purchase 14,000 units

Final inventory 6,000 units

Purchase $ = 14,000 * $75 = $1,050,000

Step-by-step explanation:

In order to have 6,000 suits in Final Inventory the department store must make a Purchase of 14,000 suits .

Final Inventory =

Beginning inventory + Purchases - Sales

If each suit costs $ 75 then the total purchase will be:

14,000 * $75 = $1,050,000