A department store has budgeted sales of 13,900 men's coats in September. Management wants to have 7,900 coats in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 5,900 coats. What is the dollar amount of the coat purchases if each coat has a cost of $66?
Question
A department store has budgeted sales of 13,900 men's coats in September. Management wants to have 7,900 coats in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 5,900 coats. What is the dollar amount of the coat purchases if each coat has a cost of $66?
Solution
To solve this problem, we first need to determine how many coats the department store needs to purchase.
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We start by adding the number of coats the store wants to have at the end of the month to the number of coats they plan to sell. This gives us the total number of coats the store needs for the month.
7,900 (desired end inventory) + 13,900 (planned sales) = 21,800 coats
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Then, we subtract the number of coats the store already has at the beginning of the month. This gives us the number of coats the store needs to purchase.
21,800 (total needed) - 5,900 (beginning inventory) = 15,900 coats
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Finally, we multiply the number of coats the store needs to purchase by the cost of each coat to find the total cost of the purchases.
15,900 (coats to purchase) * 1,049,400
So, the department store needs to spend $1,049,400 on men's coats in September.
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