Answer: $696,000
Explanation:
Given the following;
JULY direct material purchase = $300,000
AUGUST BUDGET
direct material purchase =$480,000
Selling and administrative expenses = $48,000
Depreciation expense = $36,000
Purchase of office equipment = $72,000
Wages expenses = $150,000
Only 70% of the amount of purchases made in a month being paid that month. The remaining 30% paid the next month
Therefore, total Budgeted cash disbursement for the month of August will include ;
30% of July purchase
0.3 × $300,000 = $90,000
70% of August direct material
0.7 × $480,000 = $336,000
Wage expense = $150,000
Office equipment purchase =$72, 000
Selling and administration expenses = $48,000
= $(90,000 + 336,000+ 150,000+72,000+ 48,000) = $696,000.
