Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250000 February $300000 and March $350000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are
A) $330000.
B) $320000.
C) $300000.
D) $260000.

Question

Quizplus · Accepted Answer

The budgeted cash payments for March include 60% of March purchases ($350,000 * 60% = $210,000) and 40% of February purchases ($300,000 * 40% = $120,000). Adding these together gives $210,000 + $120,000 = $330,000.

Lark Corp'S Direct Materials Budget Shows Total Cost of Direct Materials