Carson Company on July 15 Sells Merchandise on Account to Tayler

question 258

Multiple Choice

Carson Company on July 15 sells merchandise on account to Tayler Co. for $2,000, terms 2/10, n/30. On July 20 Tayler Co. returns merchandise worth $800 to Carson Company. On July 24 payment is received from Tayler Co. for the balance due. What is the amount of cash received?

• A) $1,200
• B) $1,176
• C) $1,160
• D) $2,000

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Definitions:

Direct Cost

Costs that are directly attributable to the production of goods or services, such as labor and materials.

Variable Manufacturing Costs

Costs that vary directly with the level of production output, such as raw materials, labor, and energy consumption.

Cost-Plus Pricing

A pricing strategy where a fixed percentage is added to the total cost of producing a product to determine its selling price.

Mark-Up Percentage

The fraction that is added onto the cost price of items to include overhead costs and profit within the selling price.