Brownsville Novelty Store prepared the following budget information for the month of May:

• Sales are budgeted at $308,000. All sales are on account and a provision for bad debts is made for each month at two percent of sales for the month.
• Inventory was $92,000 on April 30; an inventory increase of $14,000 is planned for May 31.
• All inventory is marked to sell at cost plus 40 percent.
• Estimated cash disbursements for selling and administrative expenses for the month are $56,000.
• Depreciation for May is projected at $6,800.

Brownsville's budgeted gross profit for May is:

Multiple Choice

• $88,000.

• $234,000.

• $123,200.

• $220,000.

• $190,000.