Question 3 Budgeted Cash Disbursements Langor Inc. is preparing its cash budget. The sales budget specifies...

 

Transcribed Image Text:

Question 3 Budgeted Cash Disbursements Langor Inc. is preparing its cash budget. The sales budget specifies the following budgeted monthly sales, in units: April May June July 12,000 6,600 13,500 12,600 The company's inventory policy is to budget for finished goods inventory equal to 30% of the following month's sales, and to budget for materials inventory equal to 50% of the following month's production requirements. Each unit of finished goods requires four pieces of material at a predicted price of $30 each. Management intends to take advantage of a 3/10, n/30 discount. Required Compute the budgeted cash disbursements during May for payment of accounts payable for material purchases. Assume material purchase are made evenly throughout the month. D Question 3 Budgeted Cash Disbursements Langor Inc. is preparing its cash budget. The sales budget specifies the following budgeted monthly sales, in units: April May June July 12,000 6,600 13,500 12,600 The company's inventory policy is to budget for finished goods inventory equal to 30% of the following month's sales, and to budget for materials inventory equal to 50% of the following month's production requirements. Each unit of finished goods requires four pieces of material at a predicted price of $30 each. Management intends to take advantage of a 3/10, n/30 discount. Required Compute the budgeted cash disbursements during May for payment of accounts payable for material purchases. Assume material purchase are made evenly throughout the month. D

Answer rating: 100% (QA)

Firstly we need to calculate the production requirements of month of May Opening Inventory in May Ma... View the full answer