Morgan Manufacturing is preparing its cash budget for the second quarter. The following amounts are budgeted for materials purchases: April $62,880 May $44,960 June $47,360 Morgan pays for 20% of its purchases in the month of purchase, 60% in the month following purchase, and

Morgan Manufacturing is preparing its cash budget for the second quarter. The following amounts are budgeted for materials purchases: April $62,880 May $44,960 June $47,360 Morgan pays for 20% of its purchases in the month of purchase, 60% in the month following purchase, and

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sherman has budgeted sales for the upcoming quarter as follows: April: 1, 600 units May: 1,900 units June: 1,750 units The desired ending finished goods inventory for each month is one - half of next month's budgeted sales. Three pounds of direct material are required for each unit produced. If direct material costs $5 per pound, and must be paid for in the month of purchase, the budgeted direct materials purchases (in dollars) for May are: Group of answer choices $1,975 $9, 875 $27, 750 $13, 875
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Zisk Company purchases direct materials on credit. Budgeted purchases are April, $80,000; May, $110,000; and June, $120,000. Cash payments for purchases are: 70% in the month of purchase and 30% in the first month after purchase. Purchases for March are $70,000. Prepare a schedule of cash payments for direct materials for April, May, and June.
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