[angie24]

The problem is, "Pascall Corp. Expects to sell 1,300 units of its camera bags in March and 900 units in April. Each unit sells for $110. Pascall's ending inventory policy is 40 percent of the following month's sales. Pascall pays its supplier $50 per unit. Prepare Pascall's purchases budget for March". I new to this and I need help! Thanks.

[pready]

The ending inventory policy is 40% percent of the following month's sales means that you have to have 40% of Aprils sales in inventory on 30 march.

So your ending inventory should be 40% * 900 units.

What is your starting inventory. From the information provided it looks like 0 units onhand, therefore to calculate purchases for March you simply add your sales in march plus your ending inventory on 30 March to get your purchases for March.

So 1,300 units sold + the number calculated above for ending inventory = Number of units to purchase

The number of units purchased above * $50 per unit = your Purchases amount.