Caskill Company Forecasts $40 000 of Sales in January, $38

Multiple Choice

Caskill Company forecasts $40 000 of sales in January, $38 000 in February, $30 000 in March, and $32 000 in April. Cost of sales is budgeted at 75% of sales. Caskill should have inventory on hand at the end of each month equal to $5 000 plus 20% of the following month's cost of sales. How much are budgeted purchases for February?

A) $22 800
B) $29 700
C) $27 300
D) $24 900