The sales budget for Modesto Corp. shows that 21,700 units of Product A and 23,700 units of Product B are going to be sold for prices of $11.70 and $13.70, respectively. The desired ending inventory of Product A is 10% higher than its beginning inventory of 3,700 units. The beginning inventory of Product B is 4,200 units. The desired ending inventory of B is 4,700 units. Budgeted purchases of Product A for the year would be:

Budgeted purchase : 22,070 units

Explanation:

The purchases budget can be determined by adjusting he sales budget for closing an d opening inventory.

The budgeted purchases product A cab be determined as follows

=Sales + closing inventory - opening inventory

Closing inventory of product A = 110% × 3,700 = 4070 units

= 21,700 + 4070 - 3,700 = 22,070 units

The budgeted purchases for product A is 22,070 units

Explanation:

The budgeted purchases  for product A can be computed by adding sales to closing inventory ,then deducting opening inventory as shown below:

 Computation of Product A Purchases

Budgeted sales                        21,700

Closing inventory(3700*110%)   4.070

Opening inventory                     (3,700)

Purchases                                   22,070

Without mincing words, the budgeted purchases of product A is 22.070 units,which is $ 258,219($11.70*22,070) in value terms

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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