**Adriana's Ski Shop: Inventory Management for 2021**Adriana's Ski Shop has reported its budgeted sales (in pairs of skis) for the following months:| Month | Budgeted Sales (pairs) ||------------|-----------------------|| October | 2,000 pairs || November | 5,000 pairs || December | 8,000 pairs || January | 9,000 pairs |Adriana follows a company policy of maintaining 20% of the next month’s sales in inventory at the end of each month. This ensures that they are prepared for the following month’s demand. **Question:**Based on this policy, how many pairs of skis should Adriana order in December?To find the number of pairs to order in December:1. Calculate 20% of January’s sales: $0.20 \times 9,000 = 1,800$ pairs.2. Since December’s sales are budgeted at 8,000 pairs, the order needed for December to meet both the sales and the inventory requirement is: \[ 8,000 \, \text{pairs (sales)} + 1,800 \, \text{pairs (inventory)} - \text{beginning inventory (from November’s calculation)} \]The solution is 7,000 pairs to order in December, accounting for sales and inventory needs.

Budgeted Purchase/order = Budgeted sales + Desired ending inventory - Beginning inventory

Adriana's Ski Shop reported the following information for 2021: October November December January Budgeted Sales in pairs (units) 2,000 pair 5,000 pair 8,000 pair 9,000 pair If company policy is to have 20% of next month's sales in house as ending inventory at the end of any given month, and Adriana always adheres to this policy, how many pairs of skis should she order in December?

Adriana's Ski Shop reported the following information for 2021: October November December January Budgeted Sales in pairs (units) 2,000 pair 5,000 pair 8,000 pair 9,000 pair If company policy is to have 20% of next month's sales in house as ending inventory at the end of any given month, and Adriana always adheres to this policy, how many pairs of skis should she order in December?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

In September 2019, the budget committee of Jason Company assembles the following data: 1. 2 Expected Sales 4. October November December Cost of goods sold is expected to be 60% of sales. 3. Desired ending merchandise inventory is 20% of the next month's cost of goods sold. The beginning inventory at October 1 will be the desired amount. $1,800,000 1,700,000 V 1,600,000 Prepare the budgeted income statement for October through gross profit on sales, including a cost of goods sold schedule. V M JASON COMPANY Budgeted Income Statement For the Month Ended October 31, 2019 $ $
Kawaii Kayaks (KK) Richard Fiesel is preparing the 2021 budget for one of KK’s kayaks. Extensive meetings with members of the sales department and executive management team have resulted in the following unit sales projections for 2021. Quarter 11,200 kayaksQuarter 21,500 kayaksQuarter 3750 kayaksQuarter 4700 kayaks KK’s policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2022 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2020, will be 200 kayaks. Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 25% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2020, is 19,400 pounds. The finishing…
Lily’s Manufacturing Company has budgeted the following unit sales: 2021 Units January 10,000 February 8,000 March 9,000 April 11,000 May 15,000 The finished goods units on hand on December 31, 2020, was 1,000 units. Each unit requires 2 pounds of raw materials that are estimated to cost an average of $3 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 10% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 20% of the pounds needed for the following month's production.…
Please do not give solution in image format thanku
Hansell Company's management wants to prepare budgets for one of its products, Duraflex, for July 2019. The firm sells the product for $97 per unit and has the following expected sales (in units) for these months in 2019: July April August September 9,400 May 7,100 June 7,200 3, зее 9,400 4,600 The production process requires 4 pounds of Dura-1000 and 2 pounds of Flexplas. The firm's policy is to maintain an ending inventory each month equal to 10% of the following month's budgeted sales, but in no case less than 500 units. All materials inventories are to be maintained at 5% of the production needs for the next month, but not to exceed 1,000 pounds. The firm expects all inventories at the end of June to be within the guidelines. The purchases department expects the materials to cost $1.25 per pound and $5.00 per pound for Dura-1000 and Flexplas, respectively. The production process requires direct labor at two skill levels. The rate for labor at the K102 level is $50 per hour and $20…
i need the answer quickly
Shalom Company prepared the following sales budget for the first two quarters of 2023: January February March April 10,000 14,000 11,000 15,000 May 18,000 June 20,000 Unit sales Shalom Company sells the product at P15 per unit. 20% of sales is cash, and the balance is on credit. The company estimates that collection of sales on account will be 60% in the month of sales with the remainder in the following month. On December 31, 2022, accounts receivable was P60,000. Amounts must be in whole numbers. Example: 88,000 or (88,000) How much is the expected total cash receipts for January?
Please help me
Required information [The following information applies to the questions displayed below.] Shadee Corporation expects to sell 540 sun shades in May and 310 in June. Each shade sells for $156. Shadee's beginning and ending finished goods inventories for May are 65 and 55 shades, respectively. Ending finished goods inventory for June will be 50 shades. Required: 1. Prepare Shadee's sales budget for May and June. 2. Prepare Shadee's production budget for May and June. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1equired 2 Prepare Shadee's sales budget for May and June. May June Budgeted Total Sales $ 54,210 x $ 48,360 Required 1 Required 2 >