X Ltd produces a line of jams. Xs estimated production of jars of jam for the fourth quarter of the year is as follows:

October	80,000
November	100,000
December	60,000

Each jar requires half a kilogram of berries. X prefers to buy the freshest berries, so its policy is to have just 10% of the following months production needs in ending inventory. On December 31, the company had 1000 kilograms. Xs pays $10 per kilogram of berries. It buys all berries on account and typically pays 50% of a months purchases in that month, and the remaining 50% the following month.

How much cash is paid for berry purchases in December?

1. $39,300
2. $49,200
3. $38,000
4. $29,000