Question

9.

The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.:

Direct materials inventory, 1/1	$	86,000
Direct materials inventory, 12/31	$	102,000
Direct materials budgeted for use during year	$	344,000
Accounts payable to suppliers, 1/1	$	54,000
Accounts payable to suppliers, 12/31	$	64,000

For the year, budgeted cash payments to suppliers amounted to:

Group of answer choices

$354,000.

$350,000.

$334,000.

$344,000.

Answer 1

B. $350,000.

Budgeted direct materials purchases for the year = Direct materials budgeted for use during the year + Budgeted direct materials inventory at December 31 - Direct materials inventory at January 1

Budgeted direct materials purchases for the year = $344,000 + $102,000 - $86,000

Budgeted direct materials purchases for the year = $360,000

Budgeted cash payments to suppliers = Amount owed to suppliers at January 1 + Budgeted purchases of direct materials - Amount owed to suppliers at December 31

Budgeted cash payments to suppliers = $54,000 + $360,000 - $64,000

Budgeted cash payments to suppliers = $350,000