Tara Company's Budget Shows the Following Credit Sales for the Current

question 87

Multiple Choice

Tara Company's budget shows the following credit sales for the current year: September,$25,000; October,$36,000; November,$30,000; December,$32,000.Experience has shown that payment for credit sales is received as follows: 15% in the month of sale,60% in the first month after sale,20% in the second month after sale,and 5% is uncollectible.How much cash will Tara Company expect to collect in November as a result of current and past credit sales?

• A) $19,700
• B) $28,400
• C) $30,000
• D) $31,100

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Definitions:

Productivity

Productivity measures the efficiency of production, often quantified as the ratio of output to inputs in the production process across a specific period.

Output

The quantity of goods or services produced in a given time period by a company, industry, or country.

Input

Essential elements or factors that are put into a system or process to achieve an output or result, similar to resources used in production.

Derived Demand

The need for a product or service that is generated by the need for a different product or service.