10.

The following information pertains to T Company:

Month Sales Purchases

January $20,000 $16,000

February $30,000 $20,000

March $50,000 $28,000

Cash is collected from customers in the following manner:

Month of sale 30%

Month following the sale 70%

30% of purchases are paid for in cash in the month of purchase and the balance is paid the following month.

Labor costs are 20% of sales. Other operating costs are $10,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.

The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

What is the amount of operating cost to be paid in March(exclude direct material)

Select one:

a. $4,000

b. $20,000

c. $8,400

d. $16,000