Desired Ending Inventory Is 80% of Beginning Inventory

question 34

Multiple Choice

Desired ending inventory is 80% of beginning inventory. If cost of goods sold is $300,000, which of the following statements is TRUE regarding purchases?

• A) Purchases will be more than cost of goods sold.
• B) Purchases will be 80% of cost of goods sold.
• C) Purchases will equal cost of goods sold.
• D) Purchases will be less than cost of goods sold.

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Definitions:

Underemployed

Refers to individuals working fewer hours than they would prefer, or in positions that don't fully utilize their skills and education.

Discouraged Workers

Individuals who have stopped looking for work because they believe there are no job opportunities available for them.

Cyclically Unemployed

Individuals who have lost their jobs due to a downturn in the business cycle, reflecting a lack of demand within the economy.

Frictionally Unemployed

Individuals temporarily out of work while transitioning between jobs or entering the workforce.