Mario's Record Shop, a Retail Store, Has an Average Gross

question 29

Essay

Mario's Record Shop, a retail store, has an average gross profit ratio of 30 percent. The sales forecast for the next four months follows:
Mario's inventory policy is to have ending inventory equal to 1.25 times the cost of sales for the subsequent month, although it is estimated that the cost of inventory at August 31 will be $85,000.Calculate the purchases budget, in dollars, for the months of September, October, and November.

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Definitions:

Sacrifice Ratio

The measure of the decline in a country's economic output as a result of efforts to reduce inflation.

High Inflation

A condition characterized by a significant and sustained rise in the general level of prices for goods and services, eroding purchasing power.

Nominal Wages

The wages paid to employees measured in current money and not adjusted for inflation, reflecting the face value of earnings.

Labor Markets

Economic markets in which labor services are bought and sold, including the supply of labor by households and the demand for labor by firms.