DuraBlend First Aid Started Operations on January 1, 2014 $$\begin{array} { l l } \text { January } & 6,000 \\\text { February } & 8,000 \\\text { March } & 7,000 \\\text { April } & 9,000\end{array}$$

question 54

Multiple Choice

DuraBlend First Aid started operations on January 1, 2014. On that date, the only assets were cash of $13,000, and inventory of $600 consisting of direct materials. The company sells first aid kits for $18 each. Additional information concerning the company's operations follows:
.Variable costs of production are $5 for each kit consisting of direct materials of $2.00, direct labor totaling $1.80, and $1.20 per unit in variable overhead.
.Other expenses include $1 per first aid kit in variable selling expenses, $22,000 per month in fixed production costs, and $14,000 per month in fixed selling and administration costs.
.Sales are collected 40% in the month of sales and 60% in the month after the sale.
.All expenses are paid in the month they are incurred except materials that are paid in the month following purchase.
.The company plans its ending inventory of first aid kits to be 20% of the units to be sold during the next month. Direct material inventory is budgeted to be equal to 10% of the next month's production requirements.
.Sales in units are forecasted as follows: $$\begin{array} { l l } \text { January } & 6,000 \\\text { February } & 8,000 \\\text { March } & 7,000 \\\text { April } & 9,000\end{array}$$
How much are budgeted cash collections for February?

• A) $57,600
• B) $6,800
• C) $122,400
• D) $133,200

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Definitions:

Slope

The determination of how steep or inclined a line is, identified by the relationship between its vertical shift and horizontal shift when examining two specific points on the line.

Intercept

In linear regression, it is the expected value of the dependent variable when all predictors are equal to zero.

Predicted GPA

An estimate of a student's grade point average based on certain predictive factors or models.

Slope

A measure of the steepness or incline of a line, typically quantified as the ratio of the vertical change to the horizontal change between two points on the line.