Memphis Company's May Sales Budget Calls for Sales of $900,000

question 40

Multiple Choice

Memphis Company's May sales budget calls for sales of $900,000.The store expects to begin May with $50,000 of inventory and to end the month with $55,000 of inventory.Gross margin is typically 45% of sales.Compute the budgeted cost of merchandise purchases for May.

• A)$550,000.
• B)$500,000.
• C)$495,000.
• D)$460,000.
• E)$490,000.

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Definitions:

Forward Contract

An individually tailored pact between two sides for the buying or selling of an asset at an agreed price on a future date.

Thermal Compressors

Devices that use thermal energy to compress or expand gases in various industrial processes, often seen in refrigeration and air conditioning systems.

Spot Rate

The ongoing market rate for buying or selling a particular currency, with immediate transfer.

Forward Rate

The agreed-upon exchange rate for currencies to be traded at a future date.