Xue Manufacturing Company manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 41 skeins of wool at a cost of $5 per skein and 0.7 gallons of dye at a cost of $9 per gallon. All other materials are indirect. At the beginning of the year Xue has an inventory of 464,000 skeins of wool at a cost of $1,113,600 and 4,300 gallons of dye at a cost of $26,230. Target ending inventory of wool and dye is zero. Xue uses the FIFO inventory cost flow method