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rewona [7]
3 years ago
5

Overhead expenses are budgeted at $2,000 per month. Included in the $2,000 are $500 of monthly depreciation expense and $200 of

allocated expenses related to the insurance premium that is paid in September. What is the cash outflow for overhead for the month of May?a. $ 200b. $ 500c. $1,300d. $1,200
Business
1 answer:
professor190 [17]3 years ago
4 0

Answer:

Cash outflow will be $1300

So option (C) will be correct answer

Explanation:

We have given overhead expense = $2000 per month

Depreciation expenses = $500

And allocated insurance expense = $200

So non cash expense = depreciation expense + allocated insurance expense = $500+$200 = $700

We have to fond the cash out flow

Cash outflow is equal to = Overhead expense - non cash expense = $2000 - $700 = $1300

So cash outflow will be $1300

So option (C) will be correct answer

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