Use the Following Information for the Next 5 Questions

question 130

Multiple Choice

Use the following information for the next 5 questions.
Kelita, Inc., projects sales for its first three months of operation as follows: Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. It is expected that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale, and the balance the third month. A 5% discount is given if payment is received in the month following sale.
-What is the projected cost of purchases for October?

• A) $80,000
• B) $93,333
• C) $120,000
• D) $180,000

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Definitions:

Gustave Le Bon

A French social psychologist best known for his work "The Crowd: A Study of the Popular Mind," which analyzes the characteristics of human crowds.

Crowd Behavior

The study of how an individual’s behavior changes when they are part of a crowd, often influenced by the crowd's size, purpose, and emotional state.

Instinct

An innate, typically fixed pattern of behavior in animals in response to certain stimuli.

Neil Smelser

A renowned sociologist known for his work on collective behavior, social change, and the sociology of education among other fields.