Which of the following statements is false with respect to the manufacturing overhead budget?

Multiple Choice

• It flows through to cost of goods sold on the income statement for merchandising companies.

• It includes depreciation even though it is not a cash flow.

• It includes estimated variable overhead and estimated fixed overhead.

• It estimates the cash disbursements for overhead that appear in the cash budget.

Assume a merchandising company provides the following information from its master budget for the month of May:

Cash balance, May 1	$ 20,000
Cash collections from customers	$ 80,000
Cash disbursements for merchandise purchases	$ 35,000
Cash disbursements for selling and administrative expenses	$ 40,000
Depreciation included in the selling and administrative expense budget	$ 5,000

If the company wishes to maintain a minimum cash balance of $30,000 at the end of every month, then its borrowings at the beginning of May will equal?