How many shovels should Benson Stores purchase for December?
Calculation of Shovels Purchase for December
Desired Ending Inventory: Bruner Stores wants 900 shovels in ending inventory on December 31.
Budgeted Sales: The budgeted sales for December are 2,500 shovels.
Beginning Inventory: The November 30 inventory of shovels was 500 units.
To determine how many shovels Benson Stores should purchase for December, we can use the equation for ending inventory:
Ending Inventory = Beginning Inventory + Total Inventory Purchased - Sales
900 = 500 + Total produced - 2,500
Total Purchased = 900 + 2,500 - 500
Total purchased = 2,900 shovels
Therefore, Benson Stores should purchase 2,900 shovels for December to meet the desired ending inventory of 900 shovels.