Information Pertaining to Yekstop Corp

question 49

Multiple Choice

Information pertaining to Yekstop Corp.'s sales revenue is presented below:Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices.

Total budgeted cash collections for Yekstop Corp. in December are:

• A) $556,512.
• B) $375,216.
• C) $495,080.
• D) $502,568.
• E) $506,780.

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Definitions:

Gallons

A volume measurement primarily utilized in the United States for quantifying liquid substances.

Raw Materials Inventory

Refers to the total cost of all the materials that are not yet processed and used in production, stored in a warehouse or inventory.

Gallons

A unit of volume for liquid measures, used primarily in the United States, equal to four quarts or approximately 3.785 liters.

Standard Costs

Predicted costs for performing a task under normal conditions, used for budgeting and measuring performance.