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Question - Can someone explain to me HOW this answer was determined? Where does this fit into the flexible budget vs. static budget?
XYZ Company prices its products by adding 30% to its cost. XYZ anticipates sales of $715,000 in March, $728,000 in April, and $624,000 in May. XYZ's policy is to have on hand enough inventories at the end of the month to cover 25% of the next month's sales. What will be the cost of the inventory that XYZ should budget for purchases in April? Please explain your work.
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