Assume a company’s sales budget for April and May is 48,000 units and 50,000 units, respectively. Its production budget for the same two months is 45,000 units and 46,000 units, respectively. Each unit of finished goods required 3 pounds of raw materials. The company always maintains raw materials inventory equal to 20% of the following months production needs. Also assume the company pays $2.85 per pound of raw material. It always pays for 50% of its raw material purchases in the month of purchase and the remainder in the following month. The accounts payable balance on March 31st is $148,000. How much cash disbursements for raw materials purchases would be shown in the company’s cash budget for April? Multiple Choice $340,230 $341,230 $346,230 $349,230
Assume a company’s sales budget for April and May is 48,000 units and 50,000 units, respectively. Its production budget for the same two months is 45,000 units and 46,000 units, respectively. Each unit of finished goods required 3 pounds of raw materials. The company always maintains raw materials inventory equal to 20% of the following months production needs.
Also assume the company pays $2.85 per pound of raw material. It always pays for 50% of its raw material purchases in the month of purchase and the remainder in the following month. The accounts payable balance on March 31st is $148,000. How much cash disbursements for raw materials purchases would be shown in the company’s
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$340,230
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$341,230
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$346,230
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$349,230
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