Reference no: EM131915608
Question - Walker Company prepares monthly budgtes. The current budget plans for a SEP ending inventory of 30,000 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the three months recent months are as follows:
July- Sales (units) 180,000, Purchases (units) 200,250
Aug-Sales 315,000, Purchases 308,250
Sep- Sales 270,000, Purchases 259,500
The following actions are required:
Prepare a merchandise purchases budget for the months of JUL, AUG, and SEP.
Compute the ratio of ending inventory to the next month's sales for each budget prepared in part 1.
Determine how many units are budgeted for October.
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