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23. Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,300 units are planned to be sold in March. The variable selling and administrative expense is $4.20 per unit. The budgeted fixed selling and administrative expense is $19,240 per month, which includes depreciation of $3,380 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:

  • a.

    $15,860

  • b.

    $5,460

  • c.

    $24,700

  • D.

    $21,320

(1,300

$4.20) + ($19,240 - $3,380) = $5,460 + $15,860 = $21,320

24. Francis Manufacturing Company is currently preparing its cash budget for next month and has gathered the following information:

The beginning cash balance will be $6,000 and the company requires a minimum cash balance at the end of the month of $5,000. How much will Francis Manufacturing need to borrow to meet its cash needs for the month?

  • a.

    $9,100

  • B.

    $14,100

  • c.

    $20,100

  • d.

    None of these.

Actual ending cash balance = Beginning cash balance + Cash receipts - Cash disbursements = $6,000 + $39,400

  • -

    ($12,000 + $9,000 + $11,500 + $22,000)

= $45,400 - $54,500 = ($9,100) Amount borrowed = Desired ending cash balance - Actual ending cash balance = $5,000 - ($9,100) = $14,100

Varughese Inc. is working on its cash budget for March. The budgeted beginning cash balance is $33,000. Budgeted cash receipts total $182,000 and budgeted cash disbursements total $191,000. The desired ending cash balance is $40,000.

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