A firm's planned purchases for a given month are $70,000 and its purchase commitments are $10,000.If its merchandise costs as a percent of selling price are .70,its open-to-buy at cost is $4,200.

Question

Quizplus · Accepted Answer

The open-to-buy at cost can be calculated using the following formula: 
Planned purchases - Purchase commitments = Open-to-buy at cost 
Substituting the given values, we get: 
$70,000 - $10,000 = $60,000 (open-to-buy at cost)

However, the question also provides information about the merchandise cost as a percent of selling price, which is not used to calculate the open-to-buy at cost. Therefore, this information is irrelevant to determining the answer.

A Firm's Planned Purchases for a Given Month Are $70,000