Sosa Company has provided the following budget information for the first quarter

Question

Sosa Company has provided the following budget information for the first quarter of 2016 EB (Click the icon to view the budget information.) Additional data related to the first quarter of 2016 for Sosa Company: 1 (Click the icon to view the data.) Read the requirements Total sales Budgeted purchases of direct materials Budgeted direct labor cost Budgeted manufacturing overhead costs 297,500 39,450 38,880 2016 Variable manufacturing overhead Depreciation Insurance and property taxes 3,645 600 9,120 Total direct materials purchases Cash Payments Direct Materials: Accounts Payable balance, December 31, 2015 1st Qtr-Direct material purchases Total payments for direct materials Budgeted selling and administrative expenses Salaries expense Rent expense Insurance expense Depreciation expense Supplies expense 5,000 3,000 1,200 100 2,975 Direct Labor: nter any number in the edit fields and then click Check Answer

Explanation / Answer

Calculation of cash payments (Amounts in $)

Hence the total cash payment for direct materials is $38,115 and cash payments for direct labor is $38,880.

Total Direct materials purchases 39,450 Cash Payments Direct Materials: Accounts Payable balance, Dec 31, 2015 10,500 1st Qtr - Direct Materials Purchase ($39,450*70%) 27,615 Total payments for direct materials ($10,500+$27,615) 38,115 Direct Labor: Total payments for direct labor 38,880

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