The following information has been provided by Jared Incorporated:
.Budgeted sales for August and September are $120,000 and $140,000, respectively.
.Budgeted direct materials inventory purchases for August and September are $60,000 and $84,000, respectively.
.30% of direct materials purchased are paid for during the month of purchase, and the remaining 70% are paid for during the subsequent month.
.20% of sales are collected during the month of sale, and the remaining 80% are collected during the subsequent month.
.Variable operating costs are budgeted at 25% of sales. Fixed operating costs are budgeted at $21,000 monthly and include depreciation expense of $7,000. Operating costs are paid for in the month that they are incurred.
.The cash balance on September 1st was $10,000. Jared's goal is to maintain a $10,000 cash balance. Jared can borrow cash in increments of $1,000.
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How much cash is budgeted to be paid in September for operating costs?

Question

The following information has been provided by Jared Incorporated:
.Budgeted sales for August and September are $120,000 and $140,000, respectively.
.Budgeted direct materials inventory purchases for August and September are $60,000 and $84,000, respectively.
.30% of direct materials purchased are paid for during the month of purchase, and the remaining 70% are paid for during the subsequent month.
.20% of sales are collected during the month of sale, and the remaining 80% are collected during the subsequent month.
.Variable operating costs are budgeted at 25% of sales. Fixed operating costs are budgeted at $21,000 monthly and include depreciation expense of $7,000. Operating costs are paid for in the month that they are incurred.
.The cash balance on September 1st was $10,000. Jared's goal is to maintain a $10,000 cash balance. Jared can borrow cash in increments of $1,000.
- 
How much cash is budgeted to be paid in September for operating costs?

Quizplus · Accepted Answer

The Answer of The following information has been provided by Jared Incorporated:
.Budgeted sales for August and September are $120,000 and $140,000, respectively.
.Budgeted direct materials inventory purchases for August and September are $60,000 and $84,000, respectively.
.30% of direct materials purchased are paid for during the month of purchase, and the remaining 70% are paid for during the subsequent month.
.20% of sales are collected during the month of sale, and the remaining 80% are collected during the subsequent month.
.Variable operating costs are budgeted at 25% of sales. Fixed operating costs are budgeted at $21,000 monthly and include depreciation expense of $7,000. Operating costs are paid for in the month that they are incurred.
.The cash balance on September 1st was $10,000. Jared's goal is to maintain a $10,000 cash balance. Jared can borrow cash in increments of $1,000.
- 
How much cash is budgeted to be paid in September for operating costs?

The Following Information Has Been Provided by Jared Incorporated