akeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 9,000 parts in stock, although sales for June are estimated to total 11,400 parts. Total sales of parts are expected to be 8,800 in July and 13,900 in August. Parts are purchased at a wholesale price of $15. The supplier has a financing arrangement by which Lakeside Components pays 70 percent of the purchase price in the month when the parts are delivered and 30 percent in the following month. Lakeside purchased 15,000 parts in May. Required: a. Estimate purchases (in units) for June and J
Lakeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 9,000 parts in stock, although sales for June are estimated to total 11,400 parts. Total sales of parts are expected to be 8,800 in July and 13,900 in August.
Parts are purchased at a wholesale price of $15. The supplier has a financing arrangement by which Lakeside Components pays 70 percent of the purchase price in the month when the parts are delivered and 30 percent in the following month. Lakeside purchased 15,000 parts in May.
Required:
a. Estimate purchases (in units) for June and July.
b. Estimate the cash required to make purchases in June and July.
- Required A
- Required B
Estimate purchases (in units) for June and July.
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| Month of Payment | Total |
| June | not attempted |
| July |
The term inventory refers to both raw materials used in manufacturing and finished goods that are ready for sale. Inventory is one of a company's most valuable assets because inventory turnover is one of the most important sources of revenue generation and subsequent earnings for the company's shareholders. The three types of inventory are raw materials, work-in-progress, and finished goods.
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