The projections of direct materials purchases that follow are for the Sombo Corporation.

	Purchases on Account	Cash Purchases
December	$40,000	$30,000
January	60,000	27,000
February	50,000	35,000
March	70,000	25,000

The company pays for 60 percent of purchases on account in the month of purchase and 40 percent in the month following the purchase. What is the expected cash payment for direct materials for the month of January?

Answer:

$27,000

$79,000

$96,000

$102,000

I know the answer is $79,000 but i need help that how it came. Please explain.