Capital Candy Company sells boxes of assorted candies, which it purchases from its suppliers for $4.50 per unit. Sales vary throughout the year, but to ensure it always has stock on hand, it has a policy of requiring an ending inventory for any period to be large enough to cover 20% of the next period's demand. Budgeted sales (in units) for the year ended December 31, 20X1 are as follows: Q1 - 13,600 Q2 - 6,700 Q3 -15,200 Q4 - 17,800 Assuming that inventory on hand at the beginning of each period matches that planned for in the policy above, what would be the cost of purchases for Q3 ?

Capital Candy Company sells boxes of assorted candies, which it purchases from its suppliers for $4.50 per unit. Sales vary throughout the year, but to ensure it always has stock on hand, it has a policy of requiring an ending inventory for any period to be large enough to cover 20% of the next period's demand. Budgeted sales (in units) for the year ended December 31, 20X1 are as follows: Q1 - 13,600 Q2 - 6,700 Q3 -15,200 Q4 - 17,800 Assuming that inventory on hand at the beginning of each period matches that planned for in the policy above, what would be the cost of purchases for Q3 ?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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