Mackinac Inc. produces denim backpacks. The production budget for the next four months is: July 5,800 units, August 7,500 units, September 7,700 units, October 8,700 units. Each backpack requires 0.6 square meters of denim.

Mackinac Inc.s denim inventory policy is 20% of next months production needs. On July 1 leather inventory was expected to be 696 square meters.

Denim is expected to cost $13.00 per square meter in June, but go up to $14.00 per square meter in July.

What is the expected cost of denim purchases in July?

Multiple Choice

• $50,076

• $51,576

• $52,476

• $52,576