Hendrix Company's direct materials budget shows total cost of direct materials purchases for January $125,000, February $150,000 and March $175,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

Question

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The budgeted cash payments for March include 60% of March's purchases ($175,000 * 60% = $105,000) and 40% of February's purchases ($150,000 * 40% = $60,000), totaling $165,000.

Hendrix Company's Direct Materials Budget Shows Total Cost of Direct