Camp Company is a sporting goods store. The company sells a tent that sleeps six people. The store expects to sell 250 tents in 2018 and 280 tents in 2019. At the beginning of 2018, Camp Company has 25 tents in Merchandise Inventory and desires to have 5% of the next year’s sales available at the end of the year. How many tents will Camp Company need to purchase in 2018?

Short Answer

Expert verified

The budgeted tents to be purchasedin 2018are239.

Step by step solution

01

Meaning of Purchase Budget

The purchase budget determines the number of units that needs to be purchased during a financial year or a particular period to meet the projected sales

02

Preparation of production budget

Particulars

2018

Budgeted tents to be sold

250

Add: Desired tents in ending inventory

14

Total tents needed

264

Less: Tents in beginning inventory

25

Budgeted tents to be purchased

239

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