A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.During August, the following items were budgeted: $$\begin{array} { l r }
\text { Wages Expense } & \$ 150,000 \
\text { Purchase of office equipment } & 72,000 \
\text { Selling and Administrative Expenses } & 48,000 \
\text { Depreciation Expense } & 36,000
\end{array}$$ The budgeted cash disbursements for August are
A)$648,000.
B)$426,000.
C)$696,000.
D)$732,000.

Question

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.During August, the following items were budgeted: $$\begin{array} { l r } 
\text { Wages Expense } & \$ 150,000 \
\text { Purchase of office equipment } & 72,000 \
\text { Selling and Administrative Expenses } & 48,000 \
\text { Depreciation Expense } & 36,000
\end{array}$$ The budgeted cash disbursements for August are
A)$648,000.
B)$426,000.
C)$696,000.
D)$732,000.

Quizplus · Accepted Answer

The Answer of A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.During August, the following items were budgeted: $$\begin{array} { l r } 
\text { Wages Expense } & \$ 150,000 \
\text { Purchase of office equipment } & 72,000 \
\text { Selling and Administrative Expenses } & 48,000 \
\text { Depreciation Expense } & 36,000
\end{array}$$ The budgeted cash disbursements for August are
A)$648,000.
B)$426,000.
C)$696,000.
D)$732,000.

A Company Has Budgeted Direct Materials Purchases of $300,000 in July