Chocolate Co

question 91

Multiple Choice

Chocolate Co.reports the following information from its sales budget:
Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale.The total amount of cash expected to be received from customers in September is:

• A)$30,000.
• B)$78,000.
• C)$108,000.
• D)$120,000.
• E)$130,500.

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Definitions:

Manufacturing Overhead Cost

Expenses related to the manufacturing process that cannot be directly traced to individual products, such as factory rent, utilities, and equipment depreciation.

Cost Of Goods Manufactured

The total cost associated with producing goods, including materials, labor, and overhead, that is ready for sale during a specific time period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including direct labor and materials.

Underapplied Manufacturing Overhead

This occurs when the actual manufacturing overhead costs exceed the overhead allocated to products during a period, indicating insufficient cost allocation.