Use the Information Below to Answer the Following Question(s)

question 115

Multiple Choice

Use the information below to answer the following question(s) .
Blaney Lumber's forecasted sales for April; May; June; and July are $200,000; $230,000; $190,000; and $240,000; respectively. Sales are 60% cash and 40% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 20% in the month of purchase and 80% in the following month.
-What are Blaney Lumber's budgeted cash payments in June for inventory purchases?

• A) $495,000
• B) $315,750
• C) $168,150
• D) $164,850

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Frequency of Customer Sales Calls

The number of times sales representatives contact or visit customers within a specific period to drive sales.

Nonselling Time

Periods in a salesperson's schedule not directly involved in selling activities, such as administrative tasks and travel.