Hallmart Expects to Make Inventory Purchases in the Next Three $$\begin{array} { l r } \text { April } & \$ 56,000 \\\text { May } & 80,000 \\\text { June } & 90,000\end{array}$$

question 137

Multiple Choice

Hallmart expects to make inventory purchases in the next three months as follows: $$\begin{array} { l r } \text { April } & \$ 56,000 \\\text { May } & 80,000 \\\text { June } & 90,000\end{array}$$ Prior experience has shown that 35% of a month's purchases are paid in the month of purchase and 65% in the month following purchase. March purchases were $65,000. How much are cash disbursements for purchases during May?

• A) $28,000
• B) $86,500
• C) $71,600
• D) $64,400

---

Definitions:

Cost-volume-profit Relationships

A financial analysis tool that helps determine how changes in costs, sales volume, and price affect a company's profit.

Customers

Individuals or entities that purchase goods or services from a business.

Activities

The types of work, or actions, involved in a manufacturing or service process.

Differential Costs

Differential costs refer to the difference in total cost that will result from selecting one alternative over another in decision-making processes.