The following are budgeted data for the Bingham Corporation, a merchandising company:

Budgeted Sales (at retail):

January $300,000

February $340,000

March $400,000

April $350,000

Cost of goods sold as a percentage of sales 60%

Desired ending inventory 75% of next month sales

Assume that all purchases are paid for in the month following the month of purchase. The cash disbursements for purchases that would appear in the April cash budget would be:

A) $240,000 B) $217,500 C) $180,000 D) $157,500

Question

Business

Robert Fletcher

16 January, 04:51

The following are budgeted data for the Bingham Corporation, a merchandising company:

Budgeted Sales (at retail):

January $300,000

February $340,000

March $400,000

April $350,000

Cost of goods sold as a percentage of sales 60%

Desired ending inventory 75% of next month sales

Assume that all purchases are paid for in the month following the month of purchase. The cash disbursements for purchases that would appear in the April cash budget would be:

A) $240,000 B) $217,500 C) $180,000 D) $157,500

+2

Answers (1)

Know the Answer?

Zoie Kelley · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Budgeted Sales (at retail):

January $300,000*0.60 = 180,000

February $340,000*0.6 = 204,000

March $400,000*0.6 = 240,000

April $350,000

Cost of goods sold as a percentage of sales 60%

Desired ending inventory 75% of next month sales

April:

Purchase from March = (240,000*0.25) + (350,000*0.60*0.75) = 60,000 + 157,500 = $217,500