Westile Company buys plain ceramic 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 $2 each and must be paid for in cash. The company has 56,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:
January 24,800
February 35,600
March 26,400
April 28,400
May 19,200
June 14,400
Required:
Estimate purchases (in units) and cash required to make purchases in January, February, and March.
Westile Company
Merchandise Purchases Budget
For the Period Ended March 31
(in units)
January February March
Units to be purchased ? ? ?
Estimated cost $ ? $ ? $ ?