Cromwell Company is a distributor that sells products to retail companies. The company sells one product for $200 per unit. Cromwell pays $150 to buy the product. Cromwell wishes to maintain an inventory at the end of each month equal to 30% of the next month’s projected sales. Purchases are paid in the month after purchase. Cromwell makes all sales on credit and collects 40% in the month of sale and 60% in the month after sale. Budgeted monthly sales for the second half of 2020 are as follows: July 10,000 units August 15,000 units September 18,000 units October 20,000 units November 16,000 units December 17,000 units what amount of merchandise inventory will be purchased in October.?
Cromwell Company is a distributor that sells products to retail companies. The company sells one product for $200 per unit. Cromwell pays $150 to buy the product. Cromwell wishes to maintain an inventory at the end of each month equal to 30% of the next month’s projected sales. Purchases are paid in the month after purchase. Cromwell makes all sales on credit and collects 40% in the month of sale and 60% in the month after sale. Budgeted monthly sales for the second half of 2020 are as follows: July 10,000 units August 15,000 units September 18,000 units October 20,000 units November 16,000 units December 17,000 units what amount of merchandise inventory will be purchased in October.?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cromwell Company is a distributor that sells products to retail companies. The company sells one product for $200 per unit. Cromwell pays $150 to buy the product. Cromwell wishes to maintain an inventory at the end of each month equal to 30% of the next month’s projected sales. Purchases are paid in the month after purchase.
Cromwell makes all sales on credit and collects 40% in the month of sale and 60% in the month after sale. Budgeted monthly sales for the second half of 2020 are as follows:
|
July |
10,000 units |
|
August |
15,000 units |
|
September |
18,000 units |
|
October |
20,000 units |
|
November |
16,000 units |
|
December |
17,000 units |
what amount of merchandise inventory will be purchased in October.?
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