The Carlquist Company makes and sells a product called Product K. Each unit of Product K sells for $24 dollars and has a unit variable cost of $18. The company has budgeted the following data for November:

•	Sales of $1,737,000, all in cash.
•	A cash balance on November 1 of $44,000.
•	Cash disbursements (other than interest) during November of $1,706,500.
•	A minimum cash balance on November 30 of $130,000.

If necessary, the company will borrow cash from a bank. The borrowing will be in multiples of $1,000 and will bear interest at 2% per month. All borrowing will take place at the beginning of the month. The November interest will be paid in cash during November.

The amount of cash needed to be borrowed on November 1 to cover all cash disbursements and to obtain the desired November 30 cash balance is:

	$148,000
	$56,000
→	$57,000

Cash Budget

Cash balance, beginning	$    44,000
Add cash receipts (all sales are for cash)	1,737,000
Total cash available	1,781,000
Less cash disbursements	1,706,500
Excess (deficiency) of cash available over disbursements	74,500
Interest (2% × $57,000*)	1,140
Cash balance before financing	73,360
Financing	57,000
Cash balance, ending	$    130,360

*Since the company desires an ending cash balance of at least $130,000, the excess of cash available over disbursements is $74,500, and cash must be borrowed in multiples of $1,000, it would appear that the company must borrow at least $57,000. The remainder of the computations establish that this borrowing will suffice, including the interest on the borrowing.