Use the Following Information for the Next 7 Questions

question 32

Multiple Choice

Use the following information for the next 7 questions. 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 pounds of direct material to produce a finished unit, and direct materials cost $5 per pound. 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 pounds. Suppose that both accounts receivable and accounts payable are zero at the beginning of January.
-Total cash sales for the January - March quarter are

• A) $69,135
• B) $62,700
• C) $24,750
• D) $49,500

---

Definitions:

Capital Budget

A budget allocating funds for the acquisition or maintenance of long-term assets such as property, plants, and equipment.

Supply Research

The study or investigation into the sources of goods and services, focusing on availability, quality, and cost.

Competitors

Businesses or individuals that operate in the same market or industry and vie for the same customers or market share.

Supply Processes

Encompasses the series of actions and steps taken to ensure that goods, services, and resources are effectively procured, managed, and delivered to meet the demands of an organization.