Caskill Company Forecasts $40,000 of Sales in January, $38,000 in February

Caskill Company forecasts $40,000 of sales in January, $38,000 in February, $30,000 in March, and $32,000 in April. Cost of goods sold is budgeted at 75% of sales. Caskill should have inventory on hand at the end of each month equal to $5,000 plus 20% of the following month's cost of goods sold. How much are budgeted purchases for January?

A) $22,800
B) $27,300
C) $29,700
D) $24,900