Hagen Company's budgeted sales and direct materials purchase are as follows.

Budgeted Sales Budgeted D. M. Purchases

January $300000 $60000

February 330000 70000

March 350000 80000

Hagen's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Hagen's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchases, and 60% in the month following purchases.

Prepare a schedule of expected payments for direct materials for March.

Question

Business

Dayton

14 October, 22:27

Hagen Company's budgeted sales and direct materials purchase are as follows.

Budgeted Sales Budgeted D. M. Purchases

January $300000 $60000

February 330000 70000

March 350000 80000

Hagen's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Hagen's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchases, and 60% in the month following purchases.

Prepare a schedule of expected payments for direct materials for March.

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Answers (1)

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Cynthia Hoffman · Answer 1

Expected payment for march=$74,000

Explanation:

Expected payment for march

40% in the month of purchase

(40% * march sales) = 40% * 80,000 = 32,000

60% in the following month:

60% * February sales = 60% * 70,000 = 42000

Expected payment in March = 32000 + 42000 = 74000

Expected payment for march=$74,000