The Cost of December Merchandise purchase would be?

A. $312,000

B. $201,600

C. $290,400

D. $296,000

Sales are budgeted at $390,000 for November, $370,000 for December, and $360,000 for January Collections are expected to be 40% in the month of sale and 60% in the month following the sale. The cost of goods sold is 80% of sales The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase Other monthly expenses to be paid in cash are $24,500 Monthly depreciation is $15,500. Ignore taxes Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,500 accumulated depreciation Total assets $ 20,500 70,500 218,400 1,094,500 $1,403,900 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 254,500 820,500 328,900 $1,403,900