The Dandy Jeans Company estimates the following cash payments for the month of J

Question

The Dandy Jeans Company estimates the following cash payments for the month of July:

Total Direct Materials Purchases: July $635,000, June $500,000, May $575,000
Total Direct Labor $67,000
Other Manufacturing Costs (Including Depreciation $25,000) $160,000
Selling and Administrative Expenses $55,000
Capital Additions $50,000
Dividends to Stockholders $30,000

It is estimated that Material Purchases are paid at a rate of 70% in the month of purchase, with the
remainder paid the following month. All other expenses are paid in the month they occur.

Explanation / Answer

I assume the question is what are the July payments. DM 635,000* .70= 444,500 (July) 500,000*.30= 150,000 (June) DL 67,000 OMC(160,000-25,000) 135,000 SG&A 55,000 Capital 50,000 Dividends 30,000 Total July payments 931,500

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