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

Multiple Choice

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 desired beginning inventory for June is:

A) $42,000
B) $35,000
C) $50,000
D) $38,000