Marty's Merchandise Has Budgeted Sales as Follows for the Second

Marty's Merchandise has budgeted sales as follows for the second quarter of the year:
Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for April, May, and June.
-The budgeted purchases for May are:

A) $49,400
B) $50,400
C) $60,000
D) $33,600

Correct Answer:

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