Desired Ending Inventory Is 20% of Next Month's Sales

question 161

Multiple Choice

Desired ending inventory is 20% of next month's sales. If cost of goods sold is $300,000 and next month's sales is $900,000, which of the following statements is true regarding purchases?

• A)Purchases will be more than cost of goods sold.
• B)Purchases cannot be predicted from the information given.
• C)Purchases will be less than cost of goods sold.
• D)Purchases will equal cost of goods sold.

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Definitions:

Time Duration

Time duration is the interval between two points in time, often measured in units such as seconds, minutes, hours, or days.

Timer Parameters

Settings that define the operation of a timer, including its start, duration, and end conditions.

Instantaneous Contact

In electrical engineering, a type of contact within a switch or relay that closes or opens immediately without any delay when activated.