(Appendix 10A)Conner Company Is a Medium-Sized Toy Distributor

question 139

Multiple Choice

(Appendix 10A) Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: March April May June July August
Sales $10,000 $20,000 $30,000 $30,000 $50,000 $40,000
Costs:
Wages 1,500 2,000 2,500 1,500
Rent 500 500 500 500
Other 400 500 600 500
Total cash disbursements in August are expected to be:

• A)$24,000
• B)$45,500
• C)$21,500
• D)$31,000

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Definitions:

Manufacturing Facilities

Buildings or complexes where goods are produced on a large scale using machinery and human labor.

Neoliberalism

An economic and political ideology advocating for reduced government intervention in the economy, free-market principles, deregulation, and globalization to foster economic growth and efficiency.

Development Strategy

A plan of action designed to achieve specific long-term goals or outcomes, usually related to economic growth or societal improvement.

Industrializing

The process of transforming an economy to be based largely on manufacturing industries rather than agriculture.