Reference no: EM132521899

Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:

                               January               February                  March

Material purchases       $ 13,000              15,110                11,930

Question 1: Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $7,600. The budgeted cash payments for materials in January are:

Option 1: $7,600.

Option 2: $20,600.

Option 3: $14,055.

Option 4: $14,100.

Option 5: $10,300.