Brief Exercise 165 Sable, Inc. has budgeted direct materials purchases of $400,0

Question

Brief Exercise 165

Sable, Inc. has budgeted direct materials purchases of $400,000 in March and $500,000 in April.

Past experience indicates that the company pays for 60% of its purchases in the month of purchase and the remaining 40% in the next month.

Other costs are all paid during the month incurred. During April, the following items were budgeted:

Wages expense $120,000

Purchase of office equipment 200,000

Selling and administrative expenses 126,000

Depreciation expense 18,000

Compute the amount of budgeted cash disbursements for April. Total budgeted cash disbursements $

Explanation / Answer

Direct materials purchases 460000 =(400000*40%)+(500000*60%) Wages expense 120000 Purchase of office equipment 200000 Selling and administrative expenses 126000 Budgeted cash disbursements for April 906000

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