Answer the Following Questions Using the Information Below

question 196

Multiple Choice

Answer the following questions using the information below:
The following information pertains to the January operating budget for Canberra Corporation.
∙ Budgeted sales for January $100 000 and for February $200 000.
∙ Collections for sales are 70% in the month of sale and 30% the next month.
∙ Gross margin is 30% of sales.
∙ Administrative costs are $10 000 each month.
∙ Beginning accounts receivable is $20 000.
∙ Beginning inventory is $14 000.
∙ Beginning accounts payable is $60 000.(All from inventory purchases. )
∙ Purchases are paid in full the following month.
∙ Desired ending inventory is 20% of next month's cost of goods sold (COGS) .
-At the end of January,budgeted accounts receivable is:

• A)$20 000.
• B)$30 000.
• C)$60 000.
• D)None of these answers are correct.

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Definitions:

Net Operating Income

Profit generated from a company's regular business operations, excluding deductions for interest and taxes.

Unit Sales Volume

The quantity of products sold by a company, not taking into account any discounts or returns.

Target Profit

The desired profit a company aims to achieve for a specific period or for a specific product.

Units Sold

The total number of product units a company sells within a specific period, a critical metric for analyzing sales performance and growth.