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## MA09 - HQ 13 ## Cromwell Company is a distributor that sells products to retail companies. The company sells one product for $200 per unit. Cromwell pays $120 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 of merchandise inventory will be purchased in October. a) $1,104,000 | b) $3,696,000 | c) $2,256,000 | d) $2,544,000

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