Greco Company Has Prepared the Following Forecasts of Monthly Sales

Essay

Greco Company has prepared the following forecasts of monthly sales:
$$\begin{array} { l | l | l | l | l | l } & \text { July } & \text { August } & \text { September } & \text { October } \\\hline \text { Sales (in Units) } \ldots \ldots \ldots \ldots & 4,500 & 5,300 & 4,000 & 3,700\end{array}$$ Greco has decided that the number of units in its inventory at the end of each month should equal 25% of the next month's sales. The budgeted cost per unit is $30.
(1) How many units should be in July's beginning inventory?
(2) What amount should be budgeted for the cost of merchandise purchases in July?