Question

A company has budgeted direct materials purchases of $230000 in July and $400000 in August. 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. During August, the following items were budgeted:

Wages Expense $60000
Purchase of office equipment 63000
Selling and Administrative Expenses 39000
Depreciation Expense 27000
The budgeted cash disbursements for August are:__________

Answer 1

$511,000

Step-by-step explanation:

The budgeted cash disbursements for August are :

Purchases - 70% x $400000 $280,000

Purchases - 30 % x $230000 $69,000

Wages Expense $60,000

Purchase of office equipment $63,000

Selling and Administrative Expenses $39,000

Total $511,000