Question

47) Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: 118 Budgeted selling price per unit Budgeted unit sales (all on credit): October November December January 9,600 10,100 13,700 11,300 3 pounds 4.00 per pound 2.7 direct labor-hours $ 23.00 per direct labor-hour $ 12.00 per direct labor-hour Raw materials requirement per unit of output Raw materials cost Direct labor requirement per unit of output Direct labor wage rate Predetermined overhead rate (all variable) $ Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 10 % of the following month's sales. The ending raw materials inventory should equal 10 % of the following month's raw materials production needs. If the budgeted cost of raw materials purchases in October is $116,772 and in November is $129,120, then in November the total budgeted cash disbursements for raw materials purchases is closest to: A) $81,740 B) $90,384 C) $38,736 D) $120,476

Answer 1

Payment for October purchases	81740	=116772*70%
Payment for November purchases	38736	=129120*30%
Budgeted cash disbursements for purchases	120476
Option D $120,476 is correct