Question

Garcia manufacturing's april sales forecast projects that 5,000 units will sell at a price of $10.50 per unit. the desired ending inventory is 30% higher than the beginning inventory, which was 1,000 units. budgeted purchases of units in april would be:

Answer 1

Budgeted Purchases = Sales units + Closing inventory - Beginning Inventory
                                   = 5,000 + (1,000 * 130%) - 1,000
                                   = 5,300 units