Answer the Following Questions Using the Information Below:
Wallace Company

Answer the following questions using the information below:
Wallace Company provides the following data for next year:
$$\begin{array} { l c } \text { Month } & \text { Budgeted Sales } \\\text { January } & \$ 120,000 \\\text { February } & 108,000 \\\text { March } & 132,000 \\\text { April } & 144,000\end{array}$$ The gross profit rate is 35% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 20% of next month's sales, stated at cost.
-What is the amount of purchases budgeted for February?

A) $32,214
B) $70,200
C) $73,320
D) $95,160

Correct Answer:

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