Chu Company provided the following information related to its inventory sales and purchases for December Year 1 and the first quarter of Year 2: Dec. Year 1Jan. Year 2Feb. Year 2Mar. Year 2 (Actual)(Budgeted)(Budgeted)(Budgeted)Cost of goods sold$80,000 $140,000 $180,000 $120,000 ? Desired ending inventory levels are 25% of the following month's projected cost of goods sold. Budgeted purchases of inventory in February Year 2 would be:

A. $225,000.
B. $165,000.
C. $180,000.
D. $135,000.


Answer: B

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