Peabody Enterprises prepared the following sales budget:

Month	Budgeted Sales
March	$6,000
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?

Select one:

a. $1,120

b. $1,440

c. $8,400

d. $1,680