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. $495,000.
B. $500,000.
C. $460,000.
D. $550,000.
E. $490,000.
Answer: B
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