The Brenneman Company's direct materials budget shows the total cost of direct materials purchases for January $125,000, February $150,000, and March $175,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

a. $160,000.

b. $165,000.

c. $130,000.

d. $150,000.

Question

Luci

Business

12 November, 16:36

The Brenneman Company's direct materials budget shows the total cost of direct materials purchases for January $125,000, February $150,000, and March $175,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

a. $160,000.

b. $165,000.

c. $130,000.

d. $150,000.

+2

Answers (1)

Know the Answer?

Nolan Barr · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Purchases:

January $125,000

February $150,000

March $175,000

Cash payments are 60% in the month of purchase and 40% in the following month.

Cash payments March:

From February = (150,000*0.4) = 60,000

From March = (175,000*0.6) = 105,000

Total = $165,000