May Corporation, a Merchandising Firm, Has Budgeted Sales as Follows

Multiple Choice

May Corporation, a merchandising firm, has budgeted sales as follows for the third quarter of the year: Cost of goods sold is equal to 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the Cost of Goods Sold for the following month. The inventory on June 30 is less than this ideal since it is only $65,000. The company is now preparing a Merchandise Purchases Budget. The budgeted purchases for July are:

A) $52,000
B) $63,050
C) $47,450
D) $91,050