Fletcher Company Has Three Products with the Following Characteristics Fixed Costs = $30,000 Per Month

question 137

Multiple Choice

Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { Product B } & \text { Product C } \\\hline \begin{array} { l } \text { Monthly sales in } \\\text { dollars }\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \\\hline \begin{array} { l } \text { Contribution margin } \\\text { ratio }\end{array} & 20 \% & 40 \% & 16 \% \\\hline\end{array}$ Fixed Costs = $30,000 per month.


-If Total sales next month are $330,000 and Fletchers sales mix remains unchanged,the total sales for product C will be closest to:

• A) $100,000.
• B) $110,000.
• C) $82,500.
• D) $137,500.

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Definitions:

Accounts Payable

Short-term liabilities of a company representing money owed to suppliers and creditors for goods and services received but not yet paid for.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating its short-term liquidity.

Inventory

This refers to the goods and materials that a business holds for the purpose of sale or production.

Pro Forma Statements

Financial statements based on hypothetical scenarios or projections.