Jaborosa, Inc A Minimum Cash Balance of $250,000 Is Required to Be

question 107

Multiple Choice

Jaborosa, Inc., a merchandising company, has provided the following budgeted amounts for the next budget period. $$\begin{array} { | l | r | } \hline \text { Beginning cash balance } & \$ 30,200 \\\hline \text { Cash collections } & 682,000 \\\hline \text { Payments for: } & \\\hline \text { Purchases of merchandise inventory } &350,000 \\\hline \text { Selling and administrative expenses } &70,200\\\hline \text { Capital expenditures } & 88,500 \\\hline\end{array}$$ A minimum cash balance of $250,000 is required to be maintained. The company can borrow in increments of $10,000 as and when required. Assume the company can borrow the needed funds at the end of the period. Calculate the ending cash balance for the budget period.

• A) $712,200
• B) $253,500
• C) $203,500
• D) $732,000

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Definitions:

Actual Output

Actual output is the quantity of finished goods or services produced by a company in a specific period.

Overapplied

A situation in cost accounting where the allocated manufacturing overhead for a period exceeds the actual manufacturing overhead costs incurred.

Underapplied

The situation in which the allocated manufacturing overhead costs are less than the actual overhead costs incurred, leading to a shortfall.

Standard Labor-Hours

The predetermined amount of time expected to be spent on a specific task or production process, used for planning and efficiency analysis.