Mackinac Inc. produces denim backpacks. The production budget for the next four months is: July 5,500 units, August 7,700 units, September 7,700 units, October 8,100 units. Each backpack requires 0.6 square meters of denim.

Mackinac Inc.s denim inventory policy is 30% of next months production needs. On July 1 leather inventory was expected to be 990 square meters.

Denim is expected to cost $5.00 per square meter in June, but go up to $6.00 per square meter in July.

What is the expected cost of denim purchases in July?