Midland Company buys tiles and prints different designs on them for souvenir and
ID: 2588574 • Letter: M
Question
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 $0.75 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:
Required:
a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March.
*Please I need help, I couldn't figure out and its just need to fill in the question mark. Thank you.
January 13,400 February 17,000 March 12,600 April 14,300 May 9,600 June 6,700Explanation / Answer
MIDLAND COMPANY Merchandise Purchases Budget For the Period Ended March 31 (in units) January February March Estimated sales 13,400 17,000 12,600 Add: Ending inventory 17,000+12,600+14,300 = 43,900 12,600+14,300+9,600 = 36,500 14,300+9,600+6,700 = 30,600 Less; Beginning inventory 28,000 17,000+12,600+14,300 = 43,900 12,600+14,300+9,600 = 36,500 Estimated units to be purchased 29,300 9,600 6,700 Units cost $ 0.75 $ 0.75 $ 0.75 Estimated cost 29,300*$0.75 = $21,975 9,600*$0.75 = $7,200 6,700*$0.75 = $5,025