22.7k views
4 votes
A company has budgeted direct materials purchases of $210000 in July and $390000 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 $50000
Purchase of office equipment 62000
Selling and Administrative Expenses 38000
Depreciation Expense 26000

The budgeted cash disbursements for August are:

User JDupont
by
8.0k points

1 Answer

2 votes

Answer:

$486,000

Step-by-step explanation:

According to the scenario, computation of the given data are as follow:-

Budgeted Cash Disbursements for August

Particular Amount ($)

Direct material purchase for July ($210,000 × 30%) 63,000

Direct material purchase for August ($390,000 × 70%) 273,000

Add-wages paid 50,000

Add: Office equipment purchase 62,000

Add: Selling and administrative expenses 38,000

Total 486,000

The depreciation is a non cash expense and the same is not relevant. Hence, ignored it

User Emil Bode
by
8.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.