Question

Need to know expects to have a cash balance of $20,000 at the end of 2014. The firm is now preparing the cash budget for January 2015 and expects to collect $25,000 from customers and pay $5,800 for inventory and $3,500 for operating activities. No investing or financial transactions are planned for January. Calculate the projected cash balance at the end of January.

A) 22,000

B) 35,700

c) 23,700

d) 22,400

Which is one of the reasons that firms use standard costs

a) to enhance customer loyalty

b) to set performance targets

c) to share best practices with other companies

d) to ensure the accuracy of financial records

Answer 1

Answer- The projected cash balance at the end of January = $35700.

Explanation- Projected cash balance at the end of January = Opening cash balance + Collection from customers – Paid for inventory- Paid for operating activities

= $20000+$25000-$5800-$3500

= $35700

Answer- One of the reasons that firms use standard costs is = to set performance targets.

Explanation- Corporations uses standard costing system to make proper performance target to achieve their planned goals and also to make budgeting more easier and effective.