7.

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

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:

$6,500.

$9,270.

$12,520.

$13,095.

$18,540.

8.

Ratchet Manufacturing anticipates total sales for August, September, and October of $200,000, $210,000, and $220,500 respectively. Cash sales are normally 25% of total sales and the remaining sales are on credit. All credit sales are collected in the first month after the sale. Compute the amount of cash received for September.

$150,000.

$202,500.

$157,500.

$102,500.

$307,500.

10.

Budgets are long term financial plans that generally cover more than a one-year period.

True

False