Sawdust Inc. wants to reduce its inventory of a particular direct material by 40%. The inventory at the beginning of the budget period is 120,000 litres at $9.90 per litre. The production budget requires the company to manufacture 84,000 units of output next month. Each of these units requires 2.5 litres of the direct material. If the budgeted cost of this direct material is $10.00 per litre, what amount should the purchases budget include for this direct material for next month?

a. $ 900,000

b. $1,632,000

c. $1,380,000

d. $1,620,000

e. $2,580,000