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Problem - Swifty's Jeans 'n Tees is a retailer specializing in designer Jeans and T-shirts. The company expects to sell 6,000 pairs of Jeans each quarter in the first two quarters, 12,000 pairs in the third quarter, and 7,000 in the fourth quarter. For T-shirts, sales are expected to be 12,000 each quarter for the first two quarters, 27,000 in the third quarter, and 17,000 in the fourth quarter. Managers would like to maintain an ending inventory equal to 20% of next quarter's sales, but they expect to have only 700 pairs of jeans and 650 T-shirts in beginning inventory.
Required -
1. Prepare a quarterly purchases budget for jeans. Assume that the sales forecast for the first quarter of the following year is the same as the first quarter forecast for this year.
2. Prepare a quarterly purchases budget for T-shirts. Assume that the sales forecast for the first quarter of the following year is the same as the first quarter forecast for this year.
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