9 Southland Company is preparing a cash budget for August Th

9. Southland Company is preparing a cash budget for August. The company has $18,200 cash at the beginning of August and anticipates $123,200 in cash receipts and $136,900 in cash disbursements during August. Southland Company wants to maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:

Multiple Choice

$0.

$10,000.

$5,500.

$8,200.

$28,200.

16. Alliance Company\'s budgets production of 28,000 units in January and 32,000 units in the February. Each finished unit requires 3 pounds of raw material K that costs $2.00 per pound. Each month\'s ending raw materials inventory should equal 40% of the following month\'s budgeted materials. The January 1 inventory for this material is 33,600 pounds. What is the budgeted materials need in pounds for January?

Multiple Choice

88,800 pounds.

84,000 pounds.

50,400 pounds.

122,400 pounds.

72,000 pounds.

Solution

9. The answer is \"$5,500\"

Cash available at end of month

= 18,200 + 123,200 - 136,900 = $4,500

The company must borrow = 10,000 - 4,500 = $5,500

16. The answer is \"88,800 pounds\"

Opening inventory = 33,600 pounds

Ending inventory = 32,000 x 3 x 40% = 38,400 pounds

Materials required for January = 28,000 x 3 = 84,000 pounds

Budgeted materials need in pounds for January

= (84,000 + 38,400) - 33,600 = 88,800 pounds