A Company Has Budgeted Direct Materials Purchases of $300,000 in July

question 109

Multiple Choice

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.During August, the following items were budgeted: $\begin{array}{lr}\text { Wages Expense } & \$ 150,000 \\\text { Purchase of office equipment } & 72,000 \\\text { Selling and Administrative Expenses } & 48,000 \\\text { Depreciation Expense } & 36,000\end{array}$ The budgeted cash disbursements for August are

• A)$648,000.
• B)$426,000.
• C)$696,000.
• D)$732,000.

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Definitions:

Prototype

An original model or first form of something from which other forms are copied or developed, often used in the context of design and innovation.

Heuristic

A problem-solving strategy using a practical method or various shortcuts to produce solutions that may not be optimal but are sufficient for reaching immediate goals.

Prototype

An original model or preliminary version of a product from which other forms are developed or copied.

Algorithm

A process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.