The Following Information Pertains to the October Operating Budget for Flockhart

question 62

Multiple Choice

The following information pertains to the October operating budget for Flockhart Corporation.
∙ Budgeted sales for October $100,000 and November $200,000.
∙ Collections for sales are 60% in the month of sale and 40% the next month.
∙ Gross margin is 30% of sales.
∙ Administrative costs are $10,000 each month.
∙ Beginning accounts receivable (October 1) $20,000.
∙ Beginning inventory (October 1) $14,000.
∙ Beginning accounts payable (October 1) $60,000. (All from inventory purchases.)
∙ Purchases are paid in full the following month.
∙ Desired ending inventory is 20% of next month's cost of goods sold (COGS) .
∙ No loans are outstanding on October 1
-At the end of October,budgeted ending inventory is:

• A)$20,000.
• B)$28,000.
• C)$40,000.
• D)None of the above is correct.

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Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for physical activity by increasing heart rate, dilating bronchial passages, and decreasing motility of the large intestine.

Relaxation

A state of being free from tension and anxiety, often achieved through techniques such as meditation or deep-breathing exercises.

Electric Shock

A sudden discharge of electricity through a part of the body, potentially causing injury or muscular contraction.

Stressful

Pertaining to or causing mental, emotional, or physical strain or tension.