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:

The budgeted cash payments for materials in January is $12,520

Explanation:

The computation of budgeted cash payment for material in January month is calculated below:

= December accounts payable + January material purchase cost

= $6,500 + $12,040 × 50%

= $6,500 + $6,020

= $12,520

In the given question, the 50% payment criteria is given that's why we considered. And, for budgeted cash payment amount, the accounts payable balance is added

Thus, The budgeted cash payments for materials in January is $12,520

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