Wislar, Inc. manufactures sweaters. The budgeted number of sweaters to be produced and sold are below:

Expected Production Expected Sales

August 3,600 2,900

September 2,900 3,900

It takes 8 skeins of yarn to produce a sweater. The company's policy is to maintain yarn at the end of each month equal to 10% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $3.00 per skein. At August 1st, 3,150 skeins of yarn were on hand.

Instructions

Compute the budgeted cost of purchases for August. Show your work.