A Company Has an Average Collection Period of 52 Days

question 47

Multiple Choice

A company has an average collection period of 52 days and accounts receivables of $250,000.What are the company's annual sales?

• A) $2,234,756
• B) $1,754,808
• C) $1,543,823
• D) $250,000

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Definitions:

Contribution Margin

The gap between sales income and variable expenses, demonstrating the extent to which income aids in covering constant costs and producing earnings.

Average Costs

The cost per unit of output on average, calculated by dividing total costs by the total quantity of output.

Selling Price

Selling price is the amount of money a buyer pays to purchase a product or service from a seller.

Incremental Cost

An increase in cost between two alternatives.