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Swan Company is a maker of men's slacks. The company would like to maintain20,000 yards of fabric in ending inventory. The beginning fabric inventory is expected to contain25,000 yards. The expected yards of fabric needed for sales is90,000.
(CMA test bank)
Sales - closing inventory + opening inventory
=90,000 -25,000 +20,000
=85,000 yards.
Sales+Closing Stock-Opening Stock=Purchases
90000=85000
Opening (25,000.00) Sales 90,000.00 Closing 20,000.00 Need to be purchase 85,000.00
90000 =85000
Ans :85000 yards of fabric need to be purchased
85000 yards - rightly answered by experts
Its required to be85000 yards needs to be purchased
Purchases= Opening Inventory-Sales+Ending Inventory
Purchases=25,000-90,000+20,000
Purchases=85,000
So, Swan needs to purchase85,000 yards of fabric
Purchases = sales + targeted ending inventory - beginning inventory which already exist .
????? =90000 +20000 -25000
purchases =85000
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Ans:85000
{20000 (of closing inventory) +90000 (of sales) -25000 (of opening inventory)}
