The Following Data Have Been Taken from the Budget Reports

question 42

Multiple Choice

The following data have been taken from the budget reports of Brandon Company, a merchandising company. $\begin{array}{lrr}&\text { Purchases }&\text { Sales }\\ \text { January } &£ 160,000 &£ 100,000\\ \text { February} &160,000&200,000\\ \text { March } &160,000&240,000\\ \text { April } &140,000 & 300,000\\ \text { May } &140,000&260,000\\ \text { June } &120,000&240,000\\\end{array}$

Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each of the next two months. Purchases for the previous November and December were £150,000 per month. Employee wages are 10% of sales for the month in which the sales occur. Operating expenses are 20% of the following month's sales. (July sales are budgeted to be £220,000.) Interest payments of £20,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be

• A)£140,000.
• B)£254,000.
• C)£200,000.
• D)£248,000.

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Definitions:

Milling Machine

A tool used in machining processes for shaping metal and other solid materials, utilizing rotary cutters to remove material.

Ordinary Simple Interest

Interest calculated only on the principal amount, not on the interest that accrues over time.

360-Day Year

An artificial accounting period used in finance that simplifies the calculation of interest by assuming each month has 30 days, resulting in a calendar year of 360 days.

Ordinary Simple Interest

Interest calculated on the principal amount of a loan or investment without compounding, based on a 365-day year.