Exercise 10-27 Cash Disbursements Budget (LO 10-4] Bond Company budgets the following purchases of direct materials for the first quarter of the year: January $150,000 February $120,000 March $ 90,000 Budgeted purchases All purchases of direct materials are made on credit. On average, the company pays 80% of its purchases in the month of sales and the remainder in the following month. Required: 1. For the months of February and March, what are the budgeted cash payments for purchases of direct materials under the assumption that there is no (cash) discount for early payment? 2. For the months of February and March, what are the budgeted cash payments for purchases of direct materials under the assumption that the purchase terms are 2/15, net 30? The company's policy is to take advantage of all cash discounts for early payment. 3a. Using the purchase terms in Requirement 2, calculate the opportunity cost if Bond does not decide to take advantage of the early payment discount. 3b. Can it be considered good economic policy to take advantage of early payment discounts? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B For the months of February and March, what are the budgeted cash payments for purchases of direct materials under the assumption that there is no (cash) discount for early payment? February $ 126,000 March 96,000 Budgeted cash payment $ Req 1 Req 2 Req Req 3B For the months of February and March, what are the budgeted cash payments for purchases of direct materials under the assumption that the purchase terms are 2/15, net 30? The company's policy is to take advantage of all cash discounts for early payment. February $ 124,080 X $ March 94,560 X Budgeted cash payment .... ....... Reg 1 Reg2 Reg 1 Req 2 Reg 3A Req 38 Req 3A Req 3B Using the purchase terms in Requirement 2, calculate the opportunity cost if Bond does not decide to take advantage of the early payment discount. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (i.e. .1234 = 12.34%.) Opportunity cost