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Burr Inc.'s direct materials budget shows total cost of direct materials purchases for April $400000 May $480000 and June $560000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are
A) $528000.
B) $512000.
C) $480000.
D) $416000.
Direct Materials Budget
A financial plan that estimates the raw materials required for production and the cost associated with these materials for a specific period.
Cash Payments
Outflows of cash to settle obligations or purchase goods and services.
Total Cost
The sum of all expenses incurred in producing a product or providing a service, including fixed and variable costs.
- Understand the impact of credit terms and cash flow timing on budgeted cash inflows and outflows.
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Learning Objectives
- Understand the impact of credit terms and cash flow timing on budgeted cash inflows and outflows.
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