Garfield Corp. expects to sell 1,300 units of its pet beds in March and 900 units in April. Each unit sells for $110. Garfield’s ending inventory policy is 30 percent of the following month’s sales. Garfield pays its supplier $40 per unit. Compute Garfield's budgeted purchases for March.

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andromache andromache · Answer 1 · 2019-11-22T06:18:34+01:00

Answer:

$47,200

Explanation:

For computing the budgeted purchase, first we have to determine the purchase unit which is shown below:

= Sale units + ending inventory units - beginning inventory units

where,

Sale units are 1,300 units

Ending inventory units = 900 units × 30% = 270 units

Beginning inventory units = 1,300 × 30% = 390 units

Now put these units to the above formula

So, the units would equal to

= 1,300 units + 270 units - 390 units

= 1,180 units

Now the budgeted purchase would be

= 1,180 units × $40

= $47,200

abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2022-04-05T13:48:24+02:00

Assiming Garfield pays its supplier $40 per unit. The Garfield's budgeted purchases for March is $47,200.

Budgeted purchases for March={[1300+(900×30%)]-(1300×30%)}×$40

Budgeted purchases for March=[(1,300+270)-390]×$40

Budgeted purchases for March=1,570-390×$40

Budgeted purchases for March=1,180×$40

Budgeted purchases for March=$47,200

Inconclusion Garfield's budgeted purchases for March is $47,200.

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