Party time Inc buys plain mylar ballons and prints diffrent designs on them for
ID: 2374248 • Letter: P
Question
Party time Inc buys plain mylar ballons and prints diffrent designs on them for variouse occaisions it imports the ballons from Taiwan so at all times it keeps on hand a stock equal to the ballonns needsd for two months'sales the balloons cost $.70 each and must be paid for in cash, the company has 14,000 balloons in stock , sales estimates based on contractes received are as follows for the next six months
jan 6,200
Feb 8,900
Mar 6,600
Apr 7,100
May 4,800
Jun 3,600
please answ er all
A estimate purchase in units for Jan, Feb, and Mar
B estimat the cash required to make purchase in jan, Feb, and Mar
Explanation / Answer
A)
Purchases in jan = ( sales in feb + march ) - ( initial stock - stock spent in jan )
purchases in Jan = (8900 + 6600) - ( 14000 - 6200 ) = 7700
Purchase in Feb = ( 7100 + 6600 ) - ( ( 8900 + 6600 ) - 8900 ) = 7100
similarly purchase in mar = 4800
B)
cash required in jan = 7700 * 0.7 = 5390
feb = 7100 * .7 = 4970
mar = 4800 * 0.7 = 3360