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 $21.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 17,100 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July 8,520 August 11,490 September 8,960 October 9,510 November 6,980 December 5,660 Question: 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 $21.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 17,100 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July 8,520 August 11,490 September 8,960 October 9,510 November 6,980 December 5,660 Question: 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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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 $21.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 17,100 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months:
| July | 8,520 |
|---|---|
| August | 11,490 |
| September | 8,960 |
| October | 9,510 |
| November | 6,980 |
| December | 5,660 |
Question:
a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September.
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