Question

C Qu. 97 Bioclean Co. sells a biodegradable... Bioclean Co., a merchandiser, sells a biodegradable cleaning product and has predicted the following sales for the first four months of the current year: Jan. Feb. March April Sales in Units2,500 2,700 2,900 2,400 Ending inventory for each month should be 20% of the next month's sales, and the December 31 inventory is consistent with that policy. How many units should be purchased in February

Answer 1

Answer:

Bioclean Co.

The units that should be purchased in February are:

= 2,740 units.

Explanation:

a) Data and Calculations:

                                          Jan.    Feb.   March    April

Sales in Units                 2,500  2,700   2,900  2,400

Ending inventory              540     580       480

Units available for sale 3,040  3,280    3,380

Beginning inventory            0     540       580     480

Purchases                    3,040  2,740   2,800

b) The units to be purchased in February are computed as Ending inventory of 580 units Plus Sales of 2,700 units Less Beginning inventory of 540 units.