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What dollar amount of the merchandise inventory should bw

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Question

BW Department store expects to generate the following sales for the three months:

Expected Sales: July= $490,000 August= $540,000 September= $580,000

BW'A cost of goods sold is 60% of sales dollars. At the end of each month, BW wants a merchandise inventory balance equals to 25% of the following month's expected cost of goods sold.

What dollar amount of the merchandise inventory should BW plan to purchase in August? Please be specific on how to compute this.

Reference no: EM132380278

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