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The sales budget for Modesto Corp. shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. Budgeted purchases of Product A for the year would be:

A. 22,400 units.

B. 20,400 units.

C. 20,000 units.

D. 19,500 units.

E. 12,200 units.

Respuesta :

Answer:

The correct answer is option (B).

Explanation:

According to the scenario, the computation of the given data are as follows:

Beginning inventory =  2,.000 units

Ending inventory =2,000 + 2,000 × 20% =  2,400 units

Sold units = 20,000 units

So, we can calculate the budgeted purchase by using following formula:

Budgeted purchase = Sold units + Ending inventory - Beginning inventory

= 20,000 + 2,400 - 2,000

= 20,400 units

abiolataiwo2015

Budgeted purchases of Product A for the year would be: B. 20,400 units.

Product A budgeted purchases

Sales units 20,000 units

Add Desired ending inventory 2,400 units

(2,000 x 1.20)

Less Beginning inventory (2,000 units)

Budgeted purchases 20,400 units

Inconclusion the budgeted purchases of Product A for the year would be:

B. 20,400 units.

Learn more about budgeted purchases here:https://brainly.com/question/19556400

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