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Question

Pantheon Company has prepared the following forecasts of monthly sales:


July August September October
Sales (in Units) .. 4,500 5,300 4,000 3,700

Pantheon has decided that the number of units in its inventory at the end of each month should equal 25% of the next month's sales. The budgeted cost per unit is $30.
(1) How many units should be in July's beginning inventory?
(2) What amount should be budgeted for the cost of merchandise purchases in July?
(3) How many units should be purchased in September?

Answer

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