Question

Sable, Inc. has budgeted direct materials purchases of $400,000 in March and $500,000 in April. Past experience indicates that the company pays for 60% of its purchases in the month of purchase and the remaining 40% in the next month. Other costs are all paid during the month incurred. During April, the following items were budgeted: Wages expense $120,000 Purchase of office equipment 200,000 Selling and administrative expenses 126,000 Depreciation expense 18,000 Compute the amount of budgeted cash disbursements for April.

Answer 1

Answer:

$906,000

Explanation:

Cash disbursements for April.

Purchases - 60 %                                      $300,000

Purchases - 40 %                                       $160,000

Wages expense                                         $120,000

Purchase of office equipment                  $200,000

Selling and administrative expenses       $126,000

Total                                                           $906,000

therefore,

the amount of budgeted cash disbursements for April is $906,000