Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory. B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t – B e g i n n i n g i n v e n t o r y This is how we calculate budgeted purchases for a particular month. Requirement: To prepare: Merchandise purchases budget for the months of April, May and June

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

What is the total manufacturing costs charged to work in process during November

Which accounting concept supports recording bad debt expense before accounts are actually uncollectible? a) Full disclosure principle b) Matching principle c) Going concern concept d) Materiality concept need answer

Can you explain the correct approach to solve this financial accounting question?

Answer 2

Question

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Answer 6

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Answer 7

Chapter 22, Problem 29QS

To determine

Concept Introduction:

Budgeted purchases: Budgeted purchases are the estimates of purchases of a particular month based on the sales requirement and ending inventory requirement and the budgeted beginning inventory.

$B u d g e t e d p u r c h a s e s = S a l e s r e q u i r e m e n t + E n d i n g i n v e n t o r y r e q u i r e m e n t - B e g i n n i n g i n v e n t o r y$

This is how we calculate budgeted purchases for a particular month.

Requirement:

To prepare:

Merchandise purchases budget for the months of April, May and June

Answer 8

Expert Solution & Answer

Answer to Problem 29QS

Solution:

Lexi Company
Merchandise purchases Budget (in Units)
For the Month of April, May and June
	April	May	June
Budgeted sales for the Month	1,040,000	1,220,000	980,000
Add: Ending inventory requirement	366,000	294,000	306,000
Total units required for the month	1,406,000	1,514,000	1,286,000
Less: Beginning inventory	280,000	366,000	294,000
Budgeted purchases	1,126,000	1,148,000	992,000

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

First, the ending inventory requirement is calculated

The ending inventory requirement is calculated as under -

$\begin{array}{l} E n d i n g inven t o r y r e q u i r e m e n t = 30 % o f N e x t M o n t h s f o r e c a s t e d s a l e s u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X F o r e c a s t e d s a l e s u n i t s f o r M a y \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 30 % X 1, 220, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r A p r i l = 366, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X F o r e c a s t e d s a l e s u n i t s f o r June \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 30 % X 980, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r May = 294, 000 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X F o r e c a s t e d s a l e s u n i t s f o r July \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 30 % X 1, 020, 00 u n i t s \\ E n d i n g inven t o r y r e q u i r e m e n t f o r June = 306,000 units \end{array}$

The total requirement of the month is calculated.

$T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t$

Given, forecasted sales for the Month –

• April = 1,040,000 units

• May =1,220,000 units

• June = 980,000 units

Ending inventory –

• April = 366,000, units

• May =294,000 units

• June = 306,000 units

Total requirement for April, May and June –

$\begin{array}{l} T o t a l r e q u i r e m e n t o f t h e m o n t h = F o r e c a s t e d s a l e s u n i t s for month + E n d i n g i n v e n t o r y r e q u i r e m e n t \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 040, 000 u n i t s + 366, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e April = 1, 406, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 220, 000 u n i t s + 294, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e May = 1, 514, 000 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 980, 000 u n i t s + 306, 00 u n i t s \\ T o t a l r e q u i r e m e n t o f t h e June = 1, 286, 000 u n i t s \end{array}$

Now, the budgeted purchases will be calculated as under –

Given, beginning inventory –

• April = 280,000 units

• May = 366,000 units

• June = 294,000 units

$\begin{array}{l} B u d g e t e d p u r c h a s e s f o r t h e m o n t h = Total r e q u i r e m e n t o f t h e m o n t h - B e g i n n i n g i n v e n t o r y \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 406, 00 u n i t s - 280, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e A p r i l = 1, 126, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 514, 000 u n i t s - 366, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e M a y = 1, 148, 00 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June = 1, 286, 000 u n i t s - 294, 000 u n i t s \\ B u d g e t e d p u r c h a s e s f o r t h e June =992,000 u n i t s \end{array}$

Answer 12

Conclusion

Thus, the merchandise purchase budget has been purchased for the months of April, May and June.

Answer 13

Ch. 22 - Prob. 1DQ Ch. 22 - Prob. 2DQ Ch. 22 - Prob. 3DQ Ch. 22 - Prob. 4DQ Ch. 22 - Prob. 5DQ Ch. 22 - Prob. 6DQ Ch. 22 - Prob. 7DQ Ch. 22 - Prob. 8DQ Ch. 22 - Prob. 9DQ Ch. 22 - Prob. 10DQ

Answer to Problem 29QS

Explanation of Solution

Want to see more full solutions like this?

Chapter 22 Solutions