Question

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are Select one: a. $528,000 b. $512,000 c. $480,000 d. $416,000

Answer 1

a. $528,000

Step-by-step explanation:

Burr, Inc.'s direct materials budget shows

total cost of direct materials purchases for

Particulars April May June

Direct Materials $400,000, $480,000 $560,000.

Cash payments are 60% in the month of purchase and 40% in the following month.

The budgeted cash payments for June will be 40% of may and 60% of June which is (0.4 x 480,000) + (0.6 x 560,000) = $528,000