Um Corporation has provided the following information concerning its raw materials purchases. The budgeted cost of raw materials purchases in November is $286,032. The company pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. The budgeted accounts payable balance at the end of November is closest to:

Question

Quizplus · Accepted Answer

To calculate the budgeted accounts payable balance at the end of November, we need to find out the amount of raw materials purchased in November that will be paid in December and add it to the amount of raw materials purchased in December that will be paid in December.

Step 1: Calculate the raw materials purchased in November that will be paid in December.

40% of the budgeted cost of raw materials purchases in November = 0.4 x $286,032 = $114,413

Step 2: Calculate the raw materials purchased in December that will be paid in December.

60% of the budgeted cost of raw materials purchases in November = 0.6 x $286,032 = $171,619

Step 3: Add Step 1 and Step 2 to get the budgeted accounts payable balance at the end of November.

$114,413 + $171,619 = $286,032

Therefore, the closest answer is C) $171,619.

Um Corporation Has Provided the Following Information Concerning Its Raw