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28 May, 06:24

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.

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  1. 28 May, 10:06
    0
    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
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