Sebring Company has the following data:

Month Budgeted Sales
April $40,000
May 44,000
June 50,000
July 52,000
August 48,000

The cost of goods sold percentage is 70% of sales and the desired ending inventory level is 25% of next month's sales at cost. ________ was the beginning inventory on May 1.
A) $3,300
B) $7,700
C) $8,750
D) $11,000

B