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

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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.

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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.

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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.

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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.

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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

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Chapter 22 Solutions