11)

Sander Enterprises prepared the following sales budget:

March - $8,000

April - $13,000

May - $12,000

June - $14,000

The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.

What is the desired ending inventory on May 31?

A) $1,680

B) $1,440

C) $8,400

D) $1,120