What dollar amount of merchandise inventory should mj plan

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

                                         July               August               September

Expected sales ..... $480.000              $560.000                 $600,000

MJ's gross profit rate is 45% 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.

Problem 1: What dollar amount of merchandise inventory should MJ plan to purchase in August?

a. $257,400

b. $314,600

c. $320,000

d. $327,800

Reference no: EM132667576

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