Adi Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The remaining 70% is paid for in the month following the purchase. How much cash should Adi expect to pay out for raw material purchases during November?
A)$896,000
B)$392,000
C)$644,000
D)$252,000

Question

Adi Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:  At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The remaining 70% is paid for in the month following the purchase. How much cash should Adi expect to pay out for raw material purchases during November?
A)$896,000 
B)$392,000 
C)$644,000 
D)$252,000

Quizplus · Accepted Answer

The Answer of Adi Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:  At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The remaining 70% is paid for in the month following the purchase. How much cash should Adi expect to pay out for raw material purchases during November?
A)$896,000 
B)$392,000 
C)$644,000 
D)$252,000

Adi Manufacturing Corporation Is Estimating the Following Raw Material Purchases