Question

Fairway's april sales forecast projects that 7,400 units will sell at a price of $11.90 per unit. the desired ending inventory is 20% higher than the beginning inventory, which was 2,400 units. budgeted purchases of units in april would be: 7,400 units. 9,800 units. 7,880 units. 10,280 units. none of the above.

Answer 1

Purchases = Sales units + Closing inventory - Beginning Inventory
                  = 7,400 + (2,400 * 120%) - 2,400
                  = 7,800 units