Adi Manufacturing Corporation Is Estimating the Following Raw Material Purchases

Multiple Choice

Adi Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The remaining 70% is paid for in the month following the purchase. How much cash should Adi expect to pay out for raw material purchases during November?

A) $896,000
B) $392,000
C) $644,000
D) $252,000