Fresplanade Co

question 49

Multiple Choice

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales) have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated total cash collections during October from accounts receivable is:

• A)$113,160.
• B)$101,400.
• C)$143,640.
• D)$125,640.
• E)$102,420.

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Definitions:

Marginal Utility per Dollar

The additional satisfaction or utility gained from consuming an additional unit of a good or service per unit of currency spent.

Utility-maximizing Consumer

A consumer who aims to get the highest level of satisfaction possible from their purchases, given their budget constraints.

Income Effect

The income effect describes how changes in consumers' income impact their purchasing choices, typically affecting the quantity of goods consumed.

Marginal Utility

The further benefit or pleasure derived by consuming an extra unit of a good or service.