Reference: 20_01 Next Year's Sales Forecast Shows That 20,000 Units of Product

Multiple Choice

Reference: 20_01
Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units.
-Budgeted purchases of Product A for the year would be:

A) 22,400 units
B) 20,400 units
C) 20,000 units
D) 19,500 units
E) 12,200 units