## Answers

**Calculation of Required purchase for the month of Octo****ber**

Budgeted sales of October | $100000 |

Add: Desired ending inventory | 40000 |

Total needed | 140000 |

Less: Beginning inventory | 20000 |

Required purchase for October | $120000 |

Desired ending inventory= $200000*20%= $40000

Beginning inventory= $100000*20%= $20000

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