Refer to Question 3-24. Assume Jaime’s ended the first quarter of this financial year with 60 hats on hand.

Required:

a Notice that Jaime’s ended the first quarter with less than 20 per cent of projected sales for October. What do you think accounts for the difference?

b How many hats should Jaime’s purchase in October?

Question 3-24

Jaime’s Hat Shop sells hats with school logos on them for $22 each. This year, Jaime’s expects to sell 350 hats in August, 300 in September, 400 in October, 800 in November, 1040 in December and 750 in January. On average, 25 per cent of customers purchase on credit. Jaime’s allows those customers to pay for their purchases the month after they have made their purchases.