Keggler's Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 21,000 units; sports gear, 81,500 units; and apparel, 49,000 units. Management believes each of these inventories is too high and begins a new policy that ending inventory in any month should equal 31% of the budgeted sales units for the following month. Budgeted sales units for March, April, May, and June follow. Footwear Sports gear Apparel Required: 1. Prepare a merchandise purchases budget (in units only) for each product for each of the months of March, April, and May. FOOTWEAR Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Less: Beginning inventory units Total required units Less: Beginning inventory units Units to purchase SPORTS GEAR Budgeted Sales in Units March April May 15,000 23,500 32,000 June 36,500 69,500 89,000 95,500 90,500 42,000 38,000 32,000 23,000 Total required units Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Units to purchase APPAREL Merchandise Purchases Budget Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Total required units Units to purchase KEGGLER'S SUPPLY March April 0 May
Keggler's Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 21,000 units; sports gear, 81,500 units; and apparel, 49,000 units. Management believes each of these inventories is too high and begins a new policy that ending inventory in any month should equal 31% of the budgeted sales units for the following month. Budgeted sales units for March, April, May, and June follow. Footwear Sports gear Apparel Required: 1. Prepare a merchandise purchases budget (in units only) for each product for each of the months of March, April, and May. FOOTWEAR Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Less: Beginning inventory units Total required units Less: Beginning inventory units Units to purchase SPORTS GEAR Budgeted Sales in Units March April May 15,000 23,500 32,000 June 36,500 69,500 89,000 95,500 90,500 42,000 38,000 32,000 23,000 Total required units Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Units to purchase APPAREL Merchandise Purchases Budget Add: Desired ending inventory Next period budgeted sales units Ratio of ending inventory to future sales Total required units Units to purchase KEGGLER'S SUPPLY March April 0 May
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Keggler's Supply is a merchandiser of three different products. Beginning inventories for March are footwear, 21,000 units; sports gear,
81,500 units; and apparel, 49,000 units. Management believes each of these inventories is too high and begins a new policy that
ending inventory in any month should equal 31% of the budgeted sales units for the following month. Budgeted sales units for March,
April, May, and June follow.
Footwear
Sports gear
Apparel
FOOTWEAR
Required:
1. Prepare a merchandise purchases budget (in units only) for each product for each of the months of March, April, and May.
Budgeted sales units
Add: Desired ending inventory
Next period budgeted sales units
Ratio of ending inventory to future sales
Less: Beginning inventory units
Total required units
Less: Beginning inventory units
Units to purchase
SPORTS GEAR
Total required units
Budgeted Sales in Units
March April May
15,000 23,500 32,000
69,500 89,000 95,500
42,000 38,000 32,000
Add: Desired ending inventory
Next period budgeted sales units
Ratio of ending inventory to future sales
Units to purchase
APPAREL
Total required units
Add: Desired ending inventory
Next period budgeted sales units
Ratio of ending inventory to future sales
Units to purchase
June
36,500
90,500
23,000
Merchandise Purchases Budget
March
KEGGLER'S SUPPLY
April
0
May
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