The sales budget of a company for November and December is 46,000 units and 48,000 units, respectively. Its production budget for the months is 43,000 units and 44,000 units, respectively. Each unit of finished goods requires 4 pounds of raw materials. The company alwar raw materials inventory equal to 20% of the following months production needs. Assume the company pays $2.75 per pound of raw material. It always pays for 50% of its raw material purchases in the month of purchase remainder in the following month. The accounts payable balance on October 31st is $146,000. What amount would the company show in November cash budget for cash disbursements for raw material purchases?

The sales budget of a company for November and December is 46,000 units and 48,000 units, respectively. Its production budget for the months is 43,000 units and 44,000 units, respectively. Each unit of finished goods requires 4 pounds of raw materials. The company alwar raw materials inventory equal to 20% of the following months production needs. Assume the company pays $2.75 per pound of raw material. It always pays for 50% of its raw material purchases in the month of purchase remainder in the following month. The accounts payable balance on October 31st is $146,000. What amount would the company show in November cash budget for cash disbursements for raw material purchases?

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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