The following information is from the manufacturing budget and the bud geted fin

Question

The following information is from the manufacturing budget and the bud geted financial statements of Fabor Fabrication. Direct materials inventory, January 1 Direct materials inventory, December 31 Direct materials budgeted for use during the year Accounts payable to suppliers of materials, January 1 Accounts payable to suppliers of materials, December 31 68,000 153,000 250,000 50,000 79,000 a. Compute the budgeted amount for purchases of direct materials during the year. b. Compute the budgeted amount for cash payments during the year to suppliers of materials. a. Budgeted amount for purchases of direct materials b. Budgeted cash payments

Explanation / Answer

Budgeted Purchase of Direct materials= Direct material budgetd+budgeted direct material Dec 31-diretc material inv jan 1
=250000+153000-68000
=335000
Budgetd cash payments to materials=Amount owed to suppliers Jan 1+budgeted Purchase-amount owed dec 31
=306000

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