Question

MJ Department Store expects to generate the following sales figures for the next three months:



July

August

September
Expected sales

$476,000

$558,000

$604,000

MJ's gross profit rate is 44% of sales dollars. At the end of each month, MJ wants a merchandise inventory balance equal to 30% of the following month's expected sales, stated at cost. What dollar amount of merchandise inventory should MJ plan to purchase in August?


$316,208

$320,208

$358,208

$333,208
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