Golden Arbours intends to start business on the first day of January. Production plans for its first four months of operations are as follows.

Each unit requires 2 kilograms of material. The firm would like to end each month with enough raw material inventory on hand to cover 25 per cent of the following month’s production needs. The material costs $7 per kilogram. Management anticipate being able to pay for 40 per cent of purchases in the month of purchase. The firm will receive a 10 per cent discount for these early payments. Management anticipate having to defer payment to the next month on 60 per cent of purchases. No discount will be taken on these late payments. The business starts with no inventories on 1 January.

Required
Determine the budgeted payments for purchases of materials for each of the first three months of operations.

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January February March April 10 000 units 25 000 units 35 000 units 35 000 units