Chapter 8, Problem 19E

Tiger Drug Store carries a variety of health and beauty aids, including 500-count bottles of vitamins. The sales budget for vitamins for the first six months of the year is presented below.

The owner of Tiger Drug believes that ending inventories should be sufficient to cover 10 percent of the next month’s projected sales. On January 1, 23 bottles of vitamins were in inventory.

Required:

1. 1. Prepare a merchandise purchases budget in bottles of vitamins for as many months as you can.
2. 2. If vitamins are priced at cost plus 80 percent, what is the dollar cost of purchases for each month of your purchases budget?