Exhibit 9-2
Bowline Inc -Refer to Exhibit 9-2

question 47

Multiple Choice

Exhibit 9-2
Bowline Inc.is a distributor which sells one product for $60 per unit.Bowline pays $33 to buy the product.In addition,fixed costs total $42,000 per month.Bowline wishes to maintain an inventory at the end of each month equal to 25% of the next month's projected sales.Purchases are paid in the month after purchase.
Bowline makes all sales on credit and collects 30% in the month of sale and 70% in the month after sale.Budgeted monthly sales in units for the first five months of 2013 are as follows:
$\begin{array}{ll}\text { January } & 20,000 \text { units } \\\text { February } & 25,000 \text { units } \\\text { March } & 28,000 \text { units } \\\text { April } & 30,000 \text { units } \\\text { May } & 26,000 \text { units }\end{array}$
-Refer to Exhibit 9-2.What will cash collections be in April?

• A)$1,764,000
• B)$1,800,000
• C)$768,000
• D)$1,716,000
• E)None of the answer choices is correct.

---

Definitions:

Profit Increase

An rise in the difference between a business's revenues and its expenses, indicating improved financial performance.

Profit-Maximizing Output

The level of production at which a company achieves its highest profit, balancing revenue against costs.

Same Price

A situation where different goods, services, or commodities are sold for an identical amount of money.

Price Customers

Refers to consumers whose purchasing decisions are primarily influenced by the price of goods or services.