Chovita Marbles purchases $1,500 in raw material each month to support sales of $2,500 that occur in the following month. In addition, Chovita pays wages, rent, and taxes that total $700 each month. What is Chovita's total monthly cash disbursements?

Question

Quizplus · Accepted Answer

To calculate Chovita's total monthly cash disbursements, we need to add up the costs of raw materials, wages, rent, and taxes.

Raw materials: $1,500 
Wages, rent, and taxes: $700

Total monthly cash disbursements: $1,500 + $700 = $2,200

Therefore, the best choice is E.

Chovita Marbles Purchases $1,500 in Raw Material Each Month to Support