History Entertainment Distributes a DVD That Sells for $12 Per

question 48

Multiple Choice

History Entertainment distributes a DVD that sells for $12 per unit. History pays $7 per unit to buy the product. Selling cost of $1 per unit is incurred to deliver the product to the customer. This is paid in cash when the product is sold. History has $50,000 per month in fixed selling and administrative expenses (including $3,000 in depreciation) , which are paid half in the month incurred and half in the next month. It is History's policy to maintain an inventory at the end of each month equal to 30% of the next month's projected cost of sales. History makes 30% of sales in cash, and the rest are on credit. Credit sales are collected in the month after sale. Budgeted monthly sales for the first five months of 2014 are as follows: $$\begin{array} { l l } \text { January } & 20,000 \text { units } \\\text { February } & 22,000 \text { units } \\\text { March } & 26,000 \text { units } \\\text { April } & 28,000 \text { units } \\\text { May } & 40,000 \text { units }\end{array}$$ How much is the budgeted cash payment for selling and administrative expenses in April?

• A) $78,000
• B) $81,000
• C) $75,000
• D) $50,000

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Definitions:

Mesopelagic

A layer of the ocean, also known as the twilight zone, that extends from 200 to 1000 meters below the surface, where only a small amount of light penetrates.

Phytoplankton

Microscopic plant-like organisms that float in fresh or salt water, form the base of aquatic food webs, and produce oxygen through photosynthesis.

Nutrient Supply

The availability of essential chemical elements or compounds required for the growth, reproduction, and maintenance of living organisms.

Zooplankton

Small free-floating aquatic organisms, primarily small animals or the larval stages of larger animals, serving as a crucial food source in aquatic ecosystems.