Answer the Following Questions Using the Information Below:
the Following

question 42

Multiple Choice

Answer the following questions using the information below:
The following information pertains to Hepburn Company:
$$\begin{array} { l r r } \text { Month } & \text { Sales } & \text { Purchases } \\\text { January } & \$ 60,000 & \$ 32,000 \\\text { February } & \$ 80,000 & \$ 40,000 \\\text { March } & \$ 100,000 & \$ 56,000\end{array}$$ - Cash is collected from customers in the following manner:
Month of sale $\quad 30 \%$
Month following the sale $70 \%$
- $40 \%$ of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
- Labor costs are $20 \%$ of sales. Other operating costs are $\$ 30,000$ per month (including $\$ 8,000$ 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?

• A) $42,000
• B) $50,000
• C) $88,400
• D) $96,400