Purple Airlines Has Ordered 30 Small Jets from Its Supplier

question 63

Multiple Choice

Purple Airlines has ordered 30 small jets from its supplier.The supplier has estimated the first aircraft will require 350 days of direct labor to manufacture and assemble.Based on past experience,the supplier estimates the learning curve to be 75%.Estimate the number of days of direct labor for all 30 jet aircrafts.

• A)3,000.5 days
• B)4,006.1 days
• C)3,456.7 days
• D)4,567.3 days

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Definitions:

Uncollectible Receivables

Accounts receivable that cannot be collected from customers, often recognized as a bad debt expense.

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or disposal.

Allowance

In accounting, a reduction from the gross amount of receivables to reflect the estimated uncollectible amounts; in budgeting, an allocated amount for specific expenses.

Doubtful Accounts

Accounts receivable that a company does not expect to collect in full, often leading to an allowance for doubtful accounts as a contra asset on the balance sheet.