Centennial Corporation is preparing its cash payments budget for next month. The following information pertains to the

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Centennial Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments:

a. Centennial Corporation pays for 50% of its direct materials purchases in the month of purchase and the remainder the following month. Last month's direct material purchases were $75,000, while the company anticipates $87,000 of direct material purchases next month.

b. Direct labor for the upcoming month is budgeted to be $36,000 and will be paid at the end of the upcoming month.

c. Manufacturing overhead is estimated to be 130% of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes $13,000 of depreciation on the plant and equipment.

d. Monthly operating expenses for next month are expected to be $41,000, which includes $2,500 of depreciation on offi ce equipment and $1,600 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred.

e. Centennial Corporation will be making an estimated tax payment of $7,800 next month. 

How much cash will be paid out next month?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For  answer-question

Managerial Accounting

ISBN: 978-0132890540

3rd edition

Authors: Karen W. Braun, Wendy M. Tietz

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