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Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $1.25 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:

January 11,900
February 18,700
March 13,600
April 14,700
May 10,300
June 7,100

Required: a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March.

MIDLAND COMPANY

Merchandise Purchases Budget

For the Period Ended March 31 (in units)

January February March

Units to be purchased

Estimated cost

Respuesta :

facundobuzzetti

Answer:

Instructions are listed below-

Explanation:

Giving the following information:

The tiles cost $1.25 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:

January 11,900 February 18,700 March 13,600 April 14,700 May 10,300 June 7,100

Units;

January:

Sales January= 11,900

Sales next three months= 47,000

Beginning inventory= 28,000 (-)

Total= 30,900

February:

Sales= 18,700

Sales next three months= 38,600

Beginning inventory= 47,000 (-)

Total= 10,300

March:

Sales= 13,600

Sales next three months= 32,100

Beginning inventory= 38,600 (-)

Total= 7,100

Cash;

January= 1.25*30,900= $38,625

February= 1.25*10,300= $12,875

March= 1.25*7,100= $8,875

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