Question

Flack Corporation, a merchandiser, provides the following information for its December budgeting process: The November 30 inventory was 1,800 units. Budgeted sales for December are 4,000 units. Desired December 31 inventory is 2,840 units. Budgeted purchases are: Multiple Choice 5,800 units. 6,840 units. 4,000 units. 5,040 units. 1,240 units.

Answer 1

Answer: 5,040 units

Step-by-step explanation:

Budgeted purchases are the purchases that the company needs to make in order to be able to sell its budgeted sales for the month and still have the desired ending inventory they want.

Budgeted purchases can be calculated by the formula:

= Budgeted sales + Desired Ending inventory - Opening inventory

= 4,000 + 2,840 - 1,800

= 6,840 - 1,800

= 5,040 units