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

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Definitions:

Commercial Products

Goods and services that are produced and marketed for profit, catering to consumer needs and preferences.

Rationalization

is the process of replacing traditional and emotional thought with reason and practicality, often in organizational and societal contexts.

Time Crunch

The feeling of having insufficient time to accomplish one's tasks or enjoy leisure activities.

Subculture

An ensemble within a more extensive culture, characterized by unique or contrasting beliefs and preferences relative to the predominant cultural patterns.