The Following Information Was Taken from Molina Company's Cash Budget

question 124

Multiple Choice

The following information was taken from Molina Company's cash budget for the month of November: $\begin{array}{lr}\text { Beginning cash balance } & \$ 144,000 \\\text { Cash receipts } & 174,000 \\\text { Cash disbursements } & 240,000\end{array}$ If the company has a policy of maintaining an end-of-the-month cash balance of $120000 the amount the company would have to borrow is

• A)$66000.
• B)$0.
• C)$42000.
• D)$120000.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or business activity, such as materials and labor.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Break-Even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and one has "broken even."

Capacity Strategies

Approaches adopted by businesses to match their operational capacity with demand levels in order to maximize efficiency and customer satisfaction.