Greco Company has prepared the following forecasts of monthly unit sales:

Greco wants the number of units in its inventory at the end of each month to equal 25% of the next month's sales. The budgeted cost per unit is $30.
(1) How many units should be in July's beginning inventory?
(2) What amount should be budgeted for the cost of merchandise purchases in July?

Question

Greco Company has prepared the following forecasts of monthly unit sales:

Greco wants the number of units in its inventory at the end of each month to equal 25% of the next month's sales. The budgeted cost per unit is $30.
(1) How many units should be in July's beginning inventory?
(2) What amount should be budgeted for the cost of merchandise purchases in July?

Quizplus · Accepted Answer

The Answer of Greco Company has prepared the following forecasts of monthly unit sales:

Greco wants the number of units in its inventory at the end of each month to equal 25% of the next month's sales. The budgeted cost per unit is $30.
(1) How many units should be in July's beginning inventory?
(2) What amount should be budgeted for the cost of merchandise purchases in July?

Greco Company Has Prepared the Following Forecasts of Monthly Unit