Fedor,Inc.has prepared the following direct materials purchases budget: $$\begin{array} { | l | r | }
\hline &{ \text { Budgeted DM } } \
\text { Month } & \text { Purchases } \
\hline \text {June } & \$ 67,000 \
\hline \text { July } & 77,000 \
\hline \text { August } & 76,300 \
\hline \text { September } & 78,000 \
\hline \text { October } & 70,200 \
\hline
\end{array}$$ All purchases are paid for as follows: 40% in the month of purchase,50% in the following month,and 10% two months after purchase.Calculate total budgeted cash payments made in October for purchases.
A) $67,080
B) $46,630
C) $35,710
D) $74,710

Question

Fedor,Inc.has prepared the following direct materials purchases budget: $$\begin{array} { | l | r | } 
\hline &{ \text { Budgeted DM } } \
\text { Month } & \text { Purchases } \
\hline \text {June } & \$ 67,000 \
\hline \text { July } & 77,000 \
\hline \text { August } & 76,300 \
\hline \text { September } & 78,000 \
\hline \text { October } & 70,200 \
\hline
\end{array}$$ All purchases are paid for as follows: 40% in the month of purchase,50% in the following month,and 10% two months after purchase.Calculate total budgeted cash payments made in October for purchases.
A) $67,080
B) $46,630
C) $35,710
D) $74,710

Quizplus · Accepted Answer

In October, the payments are for purchases made in August, September, and October. For August purchases ($76,300), 50% is paid in October, which is $38,150. For September purchases ($78,000), 40% is paid in October, which is $31,200. For October purchases ($70,200), 40% is paid in October, which is $28,080. Adding these amounts: $38,150 + $31,200 + $28,080 = $97,430.

Fedor,IncHas Prepared the Following Direct Materials Purchases Budget All Purchases Are Paid for as Follows: 40% in the |