Carver Lumber Sells Lumber and General Building Supplies to Building

question 125

Multiple Choice

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:
o Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January.
o Collections are expected to be 90% in the month of sale and 10% in the month following the sale.
o The cost of goods sold is 75% of sales.
o The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
o Other monthly expenses to be paid in cash are $24,700.
o Monthly depreciation is $16,000.
o Ignore taxes.

-Retained earnings at the end of December would be:

• A) $289,600
• B) $296,000
• C) $236,400
• D) $203,500

Understand the concept and significance of physical capital in production processes.

Explain the universal problem of scarcity across different societies.

Apply the concept of opportunity cost to everyday financial and non-financial decisions.

Understand the limitations and characteristics of different research designs, including correlational, experimental, and case studies.

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Definitions:

Pay-for-Knowledge Plans

Compensation strategies that reward employees for acquiring and using specific knowledge or skills that benefit the organization.

Traditional Incentive Systems

Reward structures typically based on performance outcomes, aiming to motivate employees through financial incentives like bonuses, raises, and commissions based on their job performance or targets achieved.

Hourly Workers

Employees who are paid for each hour of work performed, as opposed to receiving a fixed salary.

Free Trade

An economic policy that allows goods and services to be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.