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: Dec. Year 1$44,000 Jan. Year 2$46,500 Feb. Year 2$51,000 Mar. Year 2$61,500 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. $46,500.
B. $59,250.
C. $35,719.
D. $44,438.
Answer: C
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