Question

The Brenneman Company's direct materials budget shows the total cost of direct materials purchases for January $125,000, February $150,000, and March $175,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are
a. $160,000.
b. $165,000.
c. $130,000.
d. $150,000.

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Purchases:

January $125,000

February $150,000

March $175,000

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

Cash payments March:

From February= (150,000*0.4)= 60,000

From March= (175,000*0.6)= 105,000

Total= $165,000