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25 February, 06:34

Dalton Industries makes all purchases on account, subject to the following payment pattern: Paid in the month of purchase: 25% Paid in the first month following purchase: 55% Paid in the second month following purchase: 20% If purchases for January, February, and March were $210,000, $190,000, and $240,000, respectively, what were the firm's budgeted payments in March?

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  1. 25 February, 09:47
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    The firm's budgeted payments in March is $206,500

    Explanation:

    The purchase pattern is categorized into three percentage : 25%, 55%, and 20%

    Here, following month is considered to be a month which is before than actual month.

    The firm's budgeted payments in March is computed below:

    = 25% of march month + 55% of February month + 20% of January month

    = 25% * $240,000 + 55% * $190,000 + 20% * $210,000

    = $60,000 + $104,500 + $42,000

    = $206,500

    Thus, the firm's budgeted payments in March is $206,500
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