Direct materials purchases for May were $100,000, while expected direct materials purchases for June and July are $110,000 and $125,000, respectively. All direct materials purchases are paid 25% in the month of purchase and 75% the following month. What is the budgeted amount for June payments for direct materials purchases?

Question

Quizplus · Accepted Answer

The budgeted amount for June payments includes 75% of May's purchases ($100,000 * 75% = $75,000) and 25% of June's purchases ($110,000 * 25% = $27,500). Therefore, the total payment for June is $75,000 + $27,500 = $102,500.

Direct Materials Purchases for May Were $100,000, While Expected Direct