Flagstaff Company has budgeted production units of 8,700 for July and 8,900 for August. The direct materials requirement per unit is 2 ounces (oz.). The company has determined that it wants to have safety stock of direct materials on hand at the end of each month to complete 30% of the units of budgeted production in the following month. There was 5,220 ounces of direct material in inventory at the start of July. The total cost of direct materials purchases for the July direct materials budget, assuming the materials cost $1.15 per ounce, is:

Multiple Choice

• $20,148.

• $26,151.

• $14,007.

• $19,872.

• $20,010.