Question

Catano Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050, then in August the total budgeted cash disbursements for raw materials purchases is closest to:
(A) $265,150
(B) $153,930(C) $166,830
(D) $111,220

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Catano Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050

Cash disbursements:

From July= 256,550*0.60= 153,930

From August= 278,050*0.4= 111,220

Total= $265,150