Question

A company budgeted the following purchases for raw materials: Month January February March April May June...

A company budgeted the following purchases for raw materials: Month January February March April May June July Budget $10,000 $20,000 $25,000 $22,000 $27,000 $30,000 $24,000

The company has a policy of paying for 40% of the purchases in the month of purchase, 35% in the month following the purchase, and 25% in the second month following the purchase.

Based on this information, what are the budgeted cash disbursements for May?

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Answer #1
Cash disbursement for May:
May purchase (27000*40%) 10800
April Purchase (22000*35%) 7700
March Purchase (25000*25%) 6250
Total Cash disbursement 24750
Answer is $ 24750
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