The Olpe Corporation Budgeted Production for the First Three Months

Essay

The Olpe Corporation budgeted production for the first three months of 2011 is listed below.Each unit produced requires 5 pounds of direct material that cost $8 per pound.Hoxie wants to have 5% on next month's production in ending inventory each month.Hoxie receives a 2% discount on all purchases paid made during the month and pays 80% of its materials bill during the month.
Accounts Payable Balance $110,000 on January 1,2011
Raw materials inventory 30,000 pounds at $8 - $240,000
Required:
(A.)How many pounds and what is the price of the direct material Hoxie plans to purchase in February?
(B.)How much cash does Hoxie plan to pay for materials in February?
(C.)How much will the ending balance of accounts payable be February?