Question

Labor costs are 30% of sales. Other operating costs are $38,000 per month (including $10,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. How much cash will be disbursed in total in March

Answer 1

$14,000 rupees will be disbursed totally in march.            

Explanation:

• The operating cost is $38,000 per month. This is including depreciation. So cash pending on March 1 is $8,000.
• At the end of March month, the cash balance of $6000 is required. So a total of $14,000 is required at the end of the month. Including the labor costs, he wants to pay $14,000.
• He can borrow money in multiples of $1000. For emergencies, this money can be borrowed. So $14,000 should be dispersed in the month of March.