Asked by Elijah Dotson on May 22, 2024
Verified
A merchandiser,provides the following information for its December budgeting process:
The November 30 inventory was 1,800 units.
Budgeted sales for December are 4,000 units.
Desired December 31 inventory is 2,840 units.
Budgeted purchases are:
A) 5,040 units.
B) 1,240 units.
C) 6,840 units.
D) 4,000 units.
E) 5,800 units.
Desired Inventory
Desired inventory refers to the optimal amount of stock a business aims to maintain to meet expected demand without incurring excessive carrying costs or stockouts.
Budgeted Purchases
The projected amount of goods or services a business plans to buy over a certain period, usually as part of its budgeting process.
Budgeted Sales
The projected amount of sales, in units or monetary terms, as planned for a future period.
- Comprehend the calculations involved in production budgeting, including inventory planning.
Verified Answer
NN
Naturally NahlahMay 25, 2024
Final Answer :
A
Explanation :
To calculate budgeted purchases, add the desired ending inventory to the budgeted sales and then subtract the beginning inventory: 2,840+4,000−1,800=5,0402,840 + 4,000 - 1,800 = 5,0402,840+4,000−1,800=5,040 units.
Learning Objectives
- Comprehend the calculations involved in production budgeting, including inventory planning.