O'Hare Company Is in the Process of Preparing a Purchases

Multiple Choice

O'Hare Company is in the process of preparing a purchases budget for the first quarter of Year 2.The company has budgeted sales as follows: $\begin{array}{lll} \text { Dec. Year 1 } & \$ & 44,000 \\\text { Jan. Year 2 } & \$ & 46,500 \\\text { Feb. Year 2 } & \$ & 51,000 \\\text { Mar. Year 2 } & \$ & 61,500\end{array}$ Cost of goods sold is expected to be 75% of sales.The company would like to have ending inventory each month equal to 25% of the following month's predicted cost of sales.The total cost of purchases in January Year 2 is:

A) $35,719.
B) $46,500.
C) $44,438.
D) $59,250.