The Following Information Pertains to Monroe Company

question 20

Multiple Choice

The following information pertains to Monroe Company:

-Cash is collected from customers in the following manner:
Month of sale30%
Month following the sale70%
-40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
-Labor costs are 20% of sales. Other operating costs are $37,000 per month (including $8,000 of depreciation) . Both of these are paid in the month incurred.
-The cash balance on March 1 is $10,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be collected from customers in March?

• A) $96,400
• B) $91,600
• C) $100,000
• D) $118,000

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Definitions:

Percent of Revenues

A financial metric that represents a portion or ratio of a company's revenues, often used to measure the relative size or importance of a particular cost or income stream.

Supply Chain Management

The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer.

Systems Approach

A holistic analysis method that views a system as an interconnected set of parts that work together to accomplish specific goals.

Tiers of Suppliers

Different levels within the supply chain, categorized based on their directness of relationship to the company, from raw material suppliers to finished goods producers.