Expected direct materials purchases in Read Company are $70,000 in the first quarter and $90,000 in the

Question:

Expected direct materials purchases in Read Company are $70,000 in the first quarter and $90,000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are:

(a) $96,000.

(b) $90,000.

(c) $78,000.

(d) $72,000.

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