Weaver, Inc.has budgeted direct materials purchases of $150,000 in March and $240,000 in April.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.Other costs are all paid during the month incurred.During April, the following items were budgeted: Wages expense
Purchase of office equipment
Selling and administrative expenses
Depreciation expense
Accounts Receivable write-offs
$$\begin{array} { r }
\$ 75,000 \
36,000 \
24,000 \
18,000 \
10,000
\end{array}$$ How much is budgeted cash disbursements for April?
A)$324,000
B)$213,000
C)$348,000
D)$366,000

Question

Weaver, Inc.has budgeted direct materials purchases of $150,000 in March and $240,000 in April.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.Other costs are all paid during the month incurred.During April, the following items were budgeted: Wages expense
Purchase of office equipment
Selling and administrative expenses
Depreciation expense
Accounts Receivable write-offs
$$\begin{array} { r } 
\$ 75,000 \
36,000 \
24,000 \
18,000 \
10,000
\end{array}$$ How much is budgeted cash disbursements for April?
A)$324,000
B)$213,000
C)$348,000
D)$366,000

Quizplus · Accepted Answer

The budgeted cash disbursements for April include 70% of April's direct materials purchases ($240,000 * 70% = $168,000), 30% of March's direct materials purchases ($150,000 * 30% = $45,000), and all other costs incurred in April (wages $75,000, office equipment $36,000, selling and administrative expenses $24,000). Depreciation and accounts receivable write-offs are non-cash expenses. Total: $168,000 + $45,000 + $75,000 + $36,000 + $24,000 = $348,000.

Weaver, Inc $75,00036,00024,00018,00010,000\begin{array} { r } \$ 75,000 \\36,000 \\24,000 \\18,000 \\10,000\end{array}$75,00036,00024,00018,00010,000​

Weaver, Inc $\begin{array} { r } \$ 75,000 \\36,000 \\24,000 \\18,000 \\10,000\end{array}$