A local retail business owner is preparing her June budget and plans on sales of 11,000 units @ $5 per unit, or $55,000 with cost of sales at $2 per unit or $22,000. The manager expects that the business will begin June with 2,000 units and plans to have 5,000 units on hand at the end of June. Assume no change in sell price or purchase price in the time period covered.
a. Compute the purchases budget (in units and dollars) for the month of June. Show your work.
b. If operating expenses are estimated to be $1.50 per unit sold, what is the firm's expected operating income for the month of June? Show your work.