ABC Corporation is budgeting to determine how much cash they will pay each month

Question

ABC Corporation is budgeting to determine how much cash they will pay each month due to purchases of raw materials. ABC Corporation pays for 30% of their purchases in the month of purchase, 60% in the following month, and 10% two months after the purchase. ABC Corporation purchases in June totaled $129,000. Purchases for each month of the third quarter are below: August Stber $120,000 July Cost of raw material to be purchased $140,000 $180,000 What amount of total cash disbursements are budgeted in August for raw materials purchases?

Explanation / Answer

The correct answer is $ 252,900

Note :

June July August Purchases 1,29,000 1,40,000 1,20,000 30% in month of purchase 38,700 42,000 36,000 60% in following Month 77,400 84,000 10% two months after purchase 12,900 1,67,700 2,59,400 2,52,900

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