Mackinac Inc. produces denim backpacks. The production budget for the next four months is: July 5,700 units, August 7,200 units, September 8,300 units, October 8,200 units. Each backpack requires 0.6 square meters of denim. Mackinac Inc.s denim inventory policy is 25% of next months production needs. On July 1 leather inventory was expected to be 855 square meters.

Denim is expected to cost $8.00 per square meter in June, but go up to $9.00 per square meter in July. What is the expected cost of denim purchases in July?

• $31,305

• $33,705

• $33,805

• $32,805