Flannel and Flounder Ltd (see exercise 2, 34.5) use 2.5 litres of material in each unit of their product. The price of the material is currently $4.10 per litre, but the company has learned that the price will be increased to $4.25 in March 2005. The raw materials are purchased one month before production; 2100 units are budgeted to be produced in August 2005. 

Required

Prepare Flannel and Flounder Ltd's purchases budget based on its production budget for the seven months from December 2004 to June 2005. (Make all calculations to the nearest $.)

Data from Exercises 2. 34.5

Flannel and Flounder Ltd manufacture their goods one month before the goods are sold. Monthly production is 110% of the following month's sales. Budgeted sales for July 2005 are 2000 units.