Use the Information Below to Answer the Following Question(s)

question 139

Multiple Choice

Use the information below to answer the following question(s) .Grinnell Manufacturing Company has the following information for 2020:
Budget Expenses per Month
Note: All cash expenses are paid as incurred; Collections from sales are 50% in the month of sale and 50% in the month following the sale; December 2019 sales were $110,000.
-What are the expected total cash receipts for February?

• A)$118,500
• B)$89,000
• C)$88,500
• D)$85,000
• E)$80,500

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Definitions:

Negotiated Price Approach

A pricing strategy where the final sale price of a product or service is determined through bargaining between the buyer and the seller.

Market Price Approach

An approach to transfer pricing that uses the price at which the product or service transferred could be sold to outside buyers as the transfer price.

Transfer Prices

Prices set for the sale of goods and services between controlled or related legal entities within an enterprise.

Market Price Approach

The market price approach is a method used to value assets based on the current market price of similar or identical assets.