TZ Manufacturing is preparing its budget for next year. The company buys its raw materials from a variety of different suppliers. All of these suppliers offer a cash discount of 3% to customers who settle their accounts immediately in cash. TZ estimates that it will make total raw materials purchases (before discounts) of £400,000 in April 2021, £420,000 in May 2021, £380,000 in June 2021 and £360,000 in July 2021. The company expects to settle 25% of each month's total raw materials purchases in cash to qualify for the 3% cash discount. Of the remaining raw materials purchases made on credit, TZ expects to settle 48% in the month after purchase, 35% two months after purchase and 17% three months after purchase. What is TZ Manufacturing's cash payment figure for raw materials purchases in the cash budget for the month of July 2021?

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The Answer of TZ Manufacturing is preparing its budget for next year. The company buys its raw materials from a variety of different suppliers. All of these suppliers offer a cash discount of 3% to customers who settle their accounts immediately in cash. TZ estimates that it will make total raw materials purchases (before discounts) of £400,000 in April 2021, £420,000 in May 2021, £380,000 in June 2021 and £360,000 in July 2021. The company expects to settle 25% of each month's total raw materials purchases in cash to qualify for the 3% cash discount. Of the remaining raw materials purchases made on credit, TZ expects to settle 48% in the month after purchase, 35% two months after purchase and 17% three months after purchase. What is TZ Manufacturing's cash payment figure for raw materials purchases in the cash budget for the month of July 2021?

TZ Manufacturing Is Preparing Its Budget for Next Year