Question
The Carlquist Company makes and sells a product called Product K. Each unit of Product K sells for $20 dollars and has a unit variable
The Carlquist Company makes and sells a product called Product K. Each unit of Product K sells for $20 dollars and has a unit variable cost of $14. The company has budgeted the following data for November:
Sales of $1,520,000, all in cash. | |
A cash balance on November 1 of $48,000. | |
Cash disbursements (other than interest) during November of $1,513,800. | |
A minimum cash balance on November 30 of $80,000. |
If necessary, the company will borrow cash from a bank. The borrowing will be in multiples of $1,000 and will bear interest at 2% per month. All borrowing will take place at the beginning of the month. The November interest will be paid in cash during November. |
The amount of cash needed to be borrowed on November 1 to cover all cash disbursements and to obtain the desired November 30 cash balance is: |
$26,000
$64,000
$27,000
$63,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started