Mackinac Inc. produces denim backpacks. The production budget for the next four months is: July 5,300 units, August 7,300 units, September 7,700 units, October 8,700 units. Each backpack requires 0.4 square meters of denim.

Mackinac Inc.s denim inventory policy is 35% of next months production needs. On July 1 leather inventory was expected to be 742 square meters.

Denim is expected to cost $12.00 per square meter in June, but go up to $13.00 per square meter in July.

What is the expected cost of denim purchases in July?

Multiple Choice

• $29,700

• $32,200

• $32,100

• $31,200