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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
$12,040 $14,150 $10,970
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 $6,500. The budgeted cash payments for materials in January are:
Multiple Choice
Option 1: $6,500.
Option 2: $9,270.
Option 3: $12,520.
Option 4: $13,095.
Option 5: $18,540.
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