Leaverton's Forecast of Sales Is as Follows: July, $60,000; August

question 102

Multiple Choice

Leaverton's forecast of sales is as follows: July, $60,000; August, $90,000; September, $130,000. Sales are normally 80 percent cash and 20 percent credit in any month. Credit sales are collected in full in the following month. Merchandise cost averages 60 percent of sales price. The company desires an inventory as of September 30 of $52,000. The inventory as of June 30 was $25,000. Total cash receipts for August will be

• A) $72,000.
• B) $66,000.
• C) $98,000.
• D) $84,000.

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Definitions:

Emergency Room

A specialized department in a hospital that provides immediate treatment to patients with acute illnesses or injuries.

Intensive Care

Specialized medical and nursing care for patients with severe illnesses or injuries, typically provided in an intensive care unit (ICU).

Step-Down Method

An allocation technique used in cost accounting to distribute overhead costs among various cost centers or departments with multiple service departments.

Operating Department Y

A specific division within an organization that is focused on core operational tasks related to producing goods or services.