Data on Mertz Co A)$764
B)$849
C)$943
D)$1,048
E)$1,164

question 21

Multiple Choice

Data on Mertz Co.for the most recent year are shown below,along with the payables deferral period (PDP) for the firms against which it benchmarks.The firm's new CFO believes that the company could delay payments enough to increase its PDP to the benchmarks' average.If this were done,by how much would payables increase? Use a 365-day year. $$\begin{array} { l r } \text { Cost of goods sold } = & \$ 75,000 \\\text { Payables } = & \$ 5,000 \\\text {Payables deferral period } = &24.33\\\text { Benchmark payables deferral period } = & 30.00\end{array}$$

• A)$764
• B)$849
• C)$943
• D)$1,048
• E)$1,164

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Definitions:

Variable Costs

Expenditures that are directly linked to the production or sales volume, including direct labor and raw materials.

Refurbishing Materials

Materials used in the process of cleaning, repairing, and updating an item to bring it back to a like-new condition, often in electronics and furniture.

Containers Refurbished

Involves repairing, cleaning, and updating used containers to extend their useful life or repurpose them for other uses.

Spending Variance

The difference between the actual cost incurred for an item and its planned or budgeted cost, indicating how well a company manages its expenses.