The Projections of Direct Materials Purchases That Follow Are for the Sombo

question 70

Multiple Choice

The projections of direct materials purchases that follow are for the Sombo Corporation. $\begin{array}{lrr}&\text { Purchases on account }&\text { Cash Purchases }\\\text { December } & \$ 40,000 & \$ 30,000 \\\text { January } & 60,000 & 20,000 \\\text { February } & 50,000 & 35,000 \\\text { March } & 70,000 & 25,000\end{array}$
The company pays for 60 percent of purchases on account in the month of purchase and 40 percent in the month following the purchase.What is the expected cash payment for direct materials for the month of February?

• A) $52,000
• B) $72,000
• C) $89,000
• D) $95,000

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Definitions:

Tax Rate

The amount of tax people are required to pay per unit of whatever is being taxed.

Excise Tax

A tax levied on specific goods, services, or transactions, such as tobacco, alcohol, and fuel, usually to discourage consumption or raise government revenue.

Supply Curve

A graphical representation of the supply schedule, showing the relationship between quantity supplied and price.

Demand Curve

A graphical representation of the demand schedule, showing the relationship between quantity demanded and price.