I. Preparation of merchandise purchases budgets (for threeperiods)Formworks Comp

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I. Preparation of merchandise purchases budgets (for threeperiods)Formworks Company prepares monthly budgets. The current budgetplans for a September ending inventory of 15000 units. Companypolicy is to end each month with merchandise inventory equal to aspecified percent of budgeted sales for the following month.Budgeted sales and merchandise purchases for the three most recentmonths follow.1. Prepare the merchandise purchases budget for the months of JulyAugust and September.2. Compute the ratio of ending inventory to the next months salesfor each budget prepared in part 1.3. How many units are budgeted for sale in October?Sales (Units) Purchases (Units)July.. 120000 138000August.. 210000 204000September 180000 159000

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