Rolling Wheels purchases bicycle components in the month prior to assembling them into bicycles. Assembly is scheduled one month prior to budgeted sales. Rolling pays 75% of component costs in the month of purchase and 25% of the costs in the following month. Component cost included in budgeted cost of sales are
|
April |
May |
June |
July |
August |
|
$5,000 |
$6,000 |
$7,000 |
$8,000 |
$8,000 |
What is Rolling’s budgeted cash payment for components in May?
- $5,750
- $6,750
- $7,750
- $8,000