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Question - Lakeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 14,000 parts in stock, although sales for June are estimated to total 13,500 parts. Total sales of parts are expected to be 9,000 in July and 12,600 in August.
Parts are purchased at a wholesale price of $30. The supplier has a financing arrangement by which Lakeside Components pays 60 percent of the purchase price in the month when the parts are delivered and 40 percent in the following month. Lakeside purchased 13,000 parts in May.
Required -
a. Estimate purchases (in units) for June and July.
b. Estimate the cash required to make purchases in June and July.
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