Sales Are 30% Cash and 70% on Account, and 60

question 100

Multiple Choice

$$\begin{array} { l c c c c c } & \text { January } & \text { February } & \text { March } & { \text { April } } \\\text { Sales } & \$ 26,400 & \$ 23,100 & \$ 33,000 & \$ 25,000 \\\text { Production in units } & 990 & 1,440 & 1,710 & 1,200\end{array}$$
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% of credit sales are collected. The remainder is collected two months after the sale. It takes 4 kilograms of direct material to produce a finished unit, and direct materials cost $5 per kilogram. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase, 50% the following month, and 10% in the second month following the purchase. Ending direct materials inventory for each month is 40% of the next month's production needs. January's beginning materials inventory is 1,080 kilograms. Suppose that both accounts receivable and accounts payable are zero at the beginning of January.
(Appendix 10A) Cash payments on account for February are:

• A) $30,960
• B) $12,384
• C) $30,120
• D) $25,344

---

Definitions:

Pain-reducing Effect

The outcome or ability of a substance or practice to decrease or alleviate pain sensation in the body.

Sense of Commitment

A psychological state that represents being bound emotionally or intellectually to a course of action or to another person/other people.

Hardiness

A personality trait that involves a sense of control, commitment, and an ability to embrace challenge as a means of personal growth.

Sexually Transmitted Infections

Infections transmitted through sexual contact, caused by bacteria, viruses, or parasites.