Burr Inc.'s direct materials budget shows total cost of direct materials purchases for April $400000 May $480000 and June $560000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are
A) $528000.
B) $512000.
C) $480000.
D) $416000.

Question

Quizplus · Accepted Answer

The budgeted cash payments for June include 60% of June's purchases ($560,000 * 60% = $336,000) and 40% of May's purchases ($480,000 * 40% = $192,000). Adding these together gives $336,000 + $192,000 = $528,000.

Burr Inc'S Direct Materials Budget Shows Total Cost of Direct Materials