Question

MC Qu. 93 Schrank Company is trying to decide how... 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 37,000 units, 27,000 units, and 47,000 units, respectively. How many units must be purchased in September

Answer 1

Units to be purchased in September = 32,000 units

Step-by-step explanation:

The units to be be purchased = Sales for the current month + closing inventory - opening inventory

Closing inventory for September = 25% × October sales

= 25% × 47,000 = 11,750

Opening inventory in September = closing inventory of August

Closing inventory of August =25% × September sales

= 25% × 27,000 = 6750

Units to be purchased i September =

27,000 +11,750 - 6,750 = 32,000 units