(Appendix 10A) Conner Company Is a Medium-Sized Toy Distributor Cash Disbursements in July for Purchases Are Expected to Be

question 80

Multiple Choice

(Appendix 10A) Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: $\begin{array}{ccccccc}&\text { March}&\text { April }&\text { May }&\text { June}&\text { July }&\text { August}\\ \text { Sales } & \$ 10,000 & \$ 20,000 & \$ 30,000 & \$ 30,000 & \$ 50,000 & \$ 40,00 \\ \text {Cost}&&&&&\\ \text { Wages } & & & 1,500 & 2,000 & 2,500 & 1,500 \\ \text { Rent } & & & 500 & 500 & 500 & 500 \\ \text { Other } & & & 400 & 500 & 600 & 500 \\\end{array}$
Cash disbursements in July for purchases are expected to be:

• A) $43,000
• B) $16,000
• C) $22,000
• D) $21,000

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Definitions:

Workers' Compensation Costs

Expenses incurred by employers for providing benefits to employees who get injured or sick from their job.

Performance Measure

Indicators or metrics used to evaluate the efficiency, effectiveness, and performance of a company, employee, or process.

Pounds of Waste

The weight of materials or products that are discarded during the production process and not used in the final product.

Corporate Social Responsibility

A business model that helps a company be socially accountable to itself, its stakeholders, and the public.