Cromwell Company is a distributor that sells products to retail companies. The company sells one product for $200 per unit. Cromwell pays $150 to buy the product. Cromwell wishes to maintain an inventory at the end of each month equal to 30% of the next month’s projected sales. Purchases are paid in the month after purchase. Cromwell makes all sales on credit and collects 40% in the month of sale and 60% in the month after sale. Budgeted monthly sales for the second half of 2020 are as follows: 

July 10,000 units 

August 15,000 units 

September 18,000 units 

October 20,000 units 

November 16,000 units 

December 17,000 units 

What amount of merchandise inventory will be purchased in October?

Answer rating: 100% (QA)

Inventory at the end of September 18000 units Projected sales f... View the full answer