Weaver, Inc.has budgeted direct materials purchases of $150,000 in March and $240,000 in April.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.Other costs are all paid during the month incurred.During April, the following items were budgeted: How much is budgeted cash disbursements for April?

Question

Weaver, Inc.has budgeted direct materials purchases of $150,000 in March and $240,000 in April.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.Other costs are all paid during the month incurred.During April, the following items were budgeted:  How much is budgeted cash disbursements for April?

Quizplus · Accepted Answer

To calculate the budgeted cash disbursements for April, we need to consider the payments for both March and April purchases.

March purchases:
- Budgeted direct materials purchases: $150,000
- Payment in March = 70% of $150,000 = $105,000
- Payment in April = 30% of $150,000 = $45,000 (this is included in April's disbursements)

April purchases:
- Budgeted direct materials purchases: $240,000
- Payment in April = 70% of $240,000 = $168,000
- Payment in May = 30% of $240,000 = $72,000 (this is not included in April's disbursements)

Other costs are all paid during the month incurred.

Therefore, the total budgeted cash disbursements for April would be:
$105,000 (March purchases) + $168,000 (April purchases) + Other costs = $273,000 + Other costs

We don't have information about the amount of other costs, so we cannot calculate the exact total. However, the closest option to our calculation is choice C, $348,000.