Payne Company Provided the Following Information Relevant to Its Inventory

question 4

Multiple Choice

Payne Company provided the following information relevant to its inventory sales and purchases for December 2013 and the first quarter of 2014: $$\begin{array} { | l | c | c | c | c | } \hline & \text { Dec. } 2013 & \text { Jan. } 2014 & \text { Feb. 2014 } & \text { Mar. } 2014 \\\hline & \text { (Actual) } & \text { (Budgeted) } & \text { (Budgeted) } & \text { (Budgeted) } \\\hline \text { Cost of goods sold } & \$ 80,000 & \$ 140,000 & \$ 180,000 & \$ 120,000 \\\hline\end{array}$$ Desired ending inventory levels are 25% of the following month's projected cost of goods sold. The company purchases all inventory on account. January 2014 budgeted purchases are $150,000. The normal schedule for inventory payments is 60% payment in month of purchase and 40% payment in month following purchase.
Budgeted cash payments for inventory in February 2014 would be:

• A) $132,600.
• B) $152,600.
• C) $99,000.
• D) $159,000.

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Definitions:

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Individuals or groups with an interest or concern in the success or outcomes of a project, organization, or system, often because they are directly affected by its performance.

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