Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% inter
est per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) are: July August September
Cash receipts $ 20,000 $ 26,000 $ 40,000
Cash disbursements 28,000 30,000 22,000
Explanation:Direct cost are those costs which are variable in nature and can be allocated to the total units of output produced, these are easily traceable. Examples - direct material, direct labor and piece rate wages etc.
Indirect costs are those cost which cannot be allocated to the number of units produced on individual basis unlike direct cost these costs can be eitherfixed or variable in nature. Examples - rent expenses, administrative expenses.
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From the above explanation we can conclude that statement A is correct.
A Partnership is an organization where two or more owners operate a business. They share the profits in proportion to their percentage partnership interest. There are two types of partnerships: <em>General Partnerships</em> (unlimited liability) and <em>Limited partnerships</em> (liability proportional to the percentage contribution of the partnership).
