Question

IP Company pays for purchases of materials in full in the month following the purchase. During the previous month, IP had purchases of $25,000. During the current month, IP had purchases of $30,000. The amount that IP will pay during the current month for purchases is:__________

Answer 1

Answer:

Direct material current month= $25,000

Explanation:

Giving the following information:

Previous month= $25,000

Current month= $30,000

The company pays the total cost of material in the month following the purchase. Therefore, in the current month, IP will pay the cost of the previous month:

Direct material current month= $25,000