MCO Leather manufactures leather purses. Each purse requires $2$ pounds of direct materials at a cost of $$5$ per pound and $0\mathrm{.}7$ direct labor hour at a rate of $$18$ per hour. Variable overhead is budgeted at a rate of $$3$ per direct labor hour. Budgeted fixed overhead is $$12,000$ per month. The company$$s policy is to end each month with direct materials inventory equal to $40\%$ of the next month$$s direct materials requirement. At the end of August the company had $3,840$ pounds of direct materials in inventory. The company$$s production budget reports the following.