CM Enterprises Estimates That It Takes, on Average, Seven Days

question 77

Multiple Choice

CM Enterprises estimates that it takes, on average, seven days for their customers' payments to reach them, one day for the payments to be processed and deposited by their bookkeeping department, and three more days for the check to clear once they're deposited. What is their collection float?

• A) 11 days
• B) 10 days
• C) 8 days
• D) 7 days

---

Definitions:

Unit Sales

The quantity of products sold by a company in a given period.

Variable Expense

Costs that fluctuate in direct proportion to changes in an organization's activity level or volume of output, such as raw material costs.

Target Profit

The desired net income a business aims to achieve within a specific period, often used for setting sales targets or pricing strategies.

Unit Sales

The total quantity of a product sold by a company in a given period, not to be confused with sales revenue.