Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo. Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to two-month's of sales. The shirts cost $17.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 16,700 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July August September October November December 8,120 11,090 8,560 9,110 6,580 5,260 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September.
Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo. Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to two-month's of sales. The shirts cost $17.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 16,700 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July August September October November December 8,120 11,090 8,560 9,110 6,580 5,260 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 13-35 (Algo) Estimate Purchases and Cash Disbursements (LO 13-3, 4)
Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo.
Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to
two-month's of sales. The shirts cost $17.50 each and must be paid for in cash. On June 30 of the current year, the company expects to
have 16,700 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months:
July
August
September
October
November
December
8,120
11,090
8,560
Units to be purchased
Estimated cost
9,110
6,580
5,260
Required:
a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September.
DAWES DESIGNS
Merchandise Purchases Budget
For the Period Ended March 31
(in units)
July
August
September
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