The beginning inventory is expected to be 2,000 cases. Expected sales are 10,000 cases, and the...

Question:

The beginning inventory is expected to be {eq}2,000 {/eq} cases. Expected sales are {eq}10,000 {/eq} cases, and the company wishes to begin the next period with an inventory of {eq}1,000 {/eq} cases. What is the number of cases the company must purchase during the month?

Inventory:

An inventory is a product of the company which is sold at a higher price to customers. It is part of the asset of the company in the current section because inventory is expected to be sold within the year.

Answer and Explanation: 1

The formula to get the number of units sold is:

  • Inventory sold = Beginning inventory + purchases - ending inventory

To determine the purchases, we make purchases the subject of the equation.

  • Purchases = Inventory sold - beginning inventory + ending inventory

Here, we subtract the beginning inventory (2,000 cases) from the inventory sold (10,000 cases) and add the ending inventory (1,000 cases).

  • Purchases = 10,000 cases - 2,000 cases + 1,000 cases = 9,000 cases

The number of cases the company must purchase is 9,000 cases.


Learn more about this topic:

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What Is Inventory? - Definition & Example

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Chapter 13 / Lesson 7
24K

Learn what inventory in business is. Find out three types of inventory management systems and the benefits of each. Understand inventory management through examples.


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