The following information is from the manufacturing budget and the budgeted fina
ID: 2588580 • Letter: T
Question
The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication.
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.
Direct materials inventory, January 1 $ 68,000 Direct materials inventory, December 31 147,000 Direct materials budgeted for use during the year 220,000 Accounts payable to suppliers of materials, January 1 50,000 Accounts payable to suppliers of materials, December 31 79,000Explanation / Answer
Answer:-a)- Purchases of direct materials during the year:-
Direct Materials budgeted for use this year $220000
Add:- Budgeted direct material inventory, Dec 31 $147000
Total direct materials budgeted $367000
Less:- Budgeted direct material inventory, Jan 1 $68000
Budgeted direct materials purchase for year $299000
b)- Cash payments during the year to suppliers of materials:-
Accounts payable to suppliers of materials, January 1 $50000
Add:- Budgeted direct materials purchase for year $299000
Total amounts payable to suppliers $349000
Less:- Accounts payable to suppliers of materials, December 31 $79000
Budgeted cash payments to materials suppliers $270000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.