Question

The sales budget for Modesto Corp. shows that 21,900 units of Product A and 23,900 units of Product B are going to be sold for prices of $11.90 and $13.90, respectively. The desired ending inventory of Product A is 10% higher than its beginning inventory of 3,900 units. The beginning inventory of Product B is 4,400 units. The desired ending inventory of B is 4,900 units. Budgeted purchases of Product A for the year would be:A. 21,900 units.B. 26,190 units.C. 14,090 units.D. 22,290 units.E.21,400 units.

Answer 1

Answer:

22,290 units

Explanation:

Product A sales (S) = 21,900 units

Product A selling price = $11.90

Product A beggining inventory (I)= 3,900

Product A ending inventory (E) = 3,900 x 1.10 = 4,290

Budgeted purchases of product A must account for all of the projected sales and the desired ending inventory, assuming that the company already has a beginning inventory at hand. Budgeted Purchases of product A are given by:

$B = S+E-I\\B= 21,900+4,290-3,900\\B= 22,290\ units$