General,Inc All Purchases Are Paid for as Follows: 40% in the |

question 74

Multiple Choice

General,Inc.has prepared the following direct materials purchases budget: $$\begin{array} { | l | r | } \hline& { \text { Budgeted DM } } \\\text { Month } & \text { Purchases } \\\hline \text { June } & \$ 69,000 \\\hline \text { July } & 78,500 \\\hline \text { August } & 78,100 \\\hline \text { September } & 76,000 \\\hline \text { October } & 78,200 \\\hline\end{array}$$ All purchases are paid for as follows: 40% in the month of purchase,50% in the following month,and 10% two months after purchase.Calculate budgeted balance of accounts payable at the end of October.

• A)$46,920
• B)$54,520
• C)$7,600
• D)$15,420

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Definitions:

Economies of Scale

Cost advantages reaped by companies as a result of scale of operation, leading to a reduction in the per-unit cost of production.

Long-Run Average Cost Curve

A graphical representation that shows the lowest cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

ATC

The abbreviation for Average Total Cost, which is the total cost divided by the number of goods produced.

Fixed Cost

Costs that do not vary with the level of output or production, such as rent or salaries.