Problem on inventory merchandise

AB Department Store expects to generate the following sales figures for the next three months:
July         August     September
Expected sales    \$480,000    \$690,000    \$540,000

AB's Cost of Goods Sold are 65% of sales dollars. At the end of each month, AB wants a merchandise inventory balance equal to 40% of the following month's expected sales, stated at cost. What amount of dollar merchandise inventory should AB plan to purchase in August?

A) \$422,730
B) \$345,870
C) \$409,500
D) \$384,300

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