Problem
Billie Holiday's Company makes and sells laundry duffel bags. Each duffel bag sells for $20 and has a unit variable cost of $12. The company has provided the following budgeting data for March:
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Sales (all cash sales)
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$34,000
|
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Cash balance on March 1
|
4,000
|
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Cash disbursements during the month
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36,000
|
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A minimum cash balance on March 31
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4,000
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If necessary, Billie Holiday's Company will borrow cash from the local bank in multiples of $1,000.
Task:
i. How many units did Billie Holiday budget to sell during March?
ii. What is Billie Holiday's budgeted cash balance at the end of the period before borrowing?
iii. How much should Billie Holiday budget for borrowing in January?