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To compute the budgeted cash disbursements for April, we need to consider the expenses listed and how they are paid.

Here are the steps to follow:

1. **Direct Materials Purchases**: The company has budgeted direct materials purchases of $400,000 in March and $500,000 in April. The company pays 60% of the purchases in the month they are made and 40% in the following month.
   - For **March**: 40% of $400,000 is paid in April, which equals $ 0.4 \times 400,000 = 160,000 $.
   - For **April**: 60% of $500,000 is paid in April, which equals $ 0.6 \times 500,000 = 300,000 $.

2. **Salaries and Wages Expense**: $120,000 is paid fully in April.

3. **Purchase of Office Equipment**: $200,000 is paid fully in April.

4. **Selling and Administrative Expenses**: $124,000 is paid fully in April.

5. **Depreciation Expense**: $15,000 is a non-cash expense, so it is not included in cash disbursements.

### Now, summing up the cash disbursements for April:
\[
160,000 \, (\text{March direct materials}) + 300,000 \, (\text{April direct materials}) + 120,000 \, (\text{salaries}) + 200,000 \, (\text{office equipment}) + 124,000 \, (\text{selling/admin}) = 904,000
\]

Therefore, the **budgeted cash disbursements for April** is **$904,000**.

Do you want further clarifications or more details on any part of this?

Here are 5 questions you might consider:
1. How does depreciation impact cash flows if it’s a non-cash expense?
2. What would happen if the company changed the purchase payment policy to 70% upfront?
3. How would the budgeted cash disbursements change if salaries were delayed to the next month?
4. What if the company only made 50% of its office equipment purchase this month?
5. How is the budget for administrative expenses typically determined?

**Tip**: Always exclude non-cash expenses like depreciation when computing cash disbursements.

Ayayai, Inc. has budgeted direct materials purchases of $400,000 in March and $500,000 in April. The company policy is to pay for 60% of purchases in the month of purchase and the remaining 40% in the next month. Other expenses are paid during the month when incurred. During April, the following items were budgeted:
- Salaries and wages expense: $120,000
- Purchase of office equipment: $200,000
- Selling and administrative expenses: $124,000
- Depreciation expense: $15,000
Compute budgeted cash disbursements for April.

Learn how to compute Ayayai, Inc.'s budgeted cash disbursements for April. This solution covers cash flow analysis by calculating disbursements for direct material purchases, office equipment, salaries, and administrative expenses while excluding non-cash items like depreciation. Ideal for accounting and finance students.

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