Define the relationship: Ending Inventory = Beginning Inventory + Purchases - Units Sold.
Express the ending inventory of April in terms of its beginning inventory, purchases ( P A p r i l ), and units sold: E A p r i l = 7000 + P A p r i l − 1500 .
Use the fact that April's ending inventory is May's beginning inventory: E A p r i l = 9500 .
Solve for P A p r i l : P A p r i l = 9500 − 7000 + 1500 = 4000 . The number of units purchased for April is 4000 .
Explanation
Problem Analysis Let's analyze the inventory data to find the number of units purchased in April. We'll use the relationship between beginning inventory, purchases, units sold, and ending inventory to solve for the unknown.
Setting up the Equation We know that:
Ending Inventory = Beginning Inventory + Purchases - Units Sold
We need to find the 'Purchases' for April. Let's denote the purchases in April as P A p r i l . We also know that the ending inventory of April becomes the beginning inventory of May.
Using the Given Data From the table, we have:
Beginning Inventory for April = 7,000 units
Units Sold for April = 1,500 units
Beginning Inventory for May = 9,500 units
Purchases for May = 1,500 units
Units Sold for May = 1,250 units
Let E A p r i l be the ending inventory for April. Then:
E A p r i l = 7,000 + P A p r i l - 1,500
Substituting the Values Since the ending inventory of April is the beginning inventory of May, we have:
E A p r i l = 9,500
Now we can substitute this into the equation:
9,500 = 7,000 + P A p r i l - 1,500
Solving for Purchases Now, let's solve for P A p r i l :
P A p r i l = 9,500 - 7,000 + 1,500
P A p r i l = 2,500 + 1,500
P A p r i l = 4,000
Final Answer Therefore, the number of units purchased in April is 4,000.
Examples
Understanding inventory management is crucial in business. For example, a store owner uses these calculations to determine how much stock to order each month. By tracking beginning inventory, sales, and purchases, they can optimize their orders to meet customer demand without overstocking, which helps in managing costs and maximizing profits. This ensures they always have enough products available while minimizing storage expenses.
The number of units purchased in April is 4,000. This was calculated using the inventory equation: Ending Inventory = Beginning Inventory + Purchases - Units Sold. By substituting known values from the inventory data, we solved for purchases in April.
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