Answer:
<u>February.</u>
Desired ending inventory = 10% of March Cost of goods(COGS):
= 10% * 35,000
= $3,500
Inventory needed = COGS + ending inventory
= 32,000 + 3,500
= $35,500
Beginning inventory = January ending inventory = $3,200
Required Purchases = Inventory needed - Beginning inventory
= 35,500 - 3,200
= $32,300
<u>March</u>
Desired ending inventory = 10% of April COGS:
= 10% * 40,000
= $4,000
Inventory needed:
= 35,000 + 4,000
= $39,000
Beginning inventory = February ending inventory = $3,500
Required purchases:
= 39,000 - 3,500
= $35,500
