Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 1,100 pizzas in the first month and 1,000 pizzas in the second and third months. The pizza is expected to cost $6 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of accounts payable on its budgeted balance at the end of the quarter.

Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 1,100 pizzas in the first month and 1,000 pizzas in the second and third months. The pizza is expected to cost $6 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of accounts payable on its budgeted balance at the end of the quarter.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter21: Budgeting

Section: Chapter Questions

Problem 21.13EX

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