A firm policy is to pay for raw material supplies, 20% in the month of purchase and 80% in the following month. Supplies paid for in the month of purchase earns a 5% cash discount. Budgeted purchases are as follows: June July August September 900000, 1100000, 800000, 600000. What are the budgeted payments to raw material suppliers in the month of August?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A firm policy is to pay for raw material supplies, 20% in the month of purchase and 80% in the following month. Supplies paid for in the month of purchase earns a 5% cash discount. Budgeted purchases are as follows:
June July August September
900000, 1100000, 800000, 600000.
What are the budgeted payments to raw material suppliers in the month of August?
Step by step
Solved in 2 steps with 2 images
