Diltex Farm Supply Is Located in a Small Town in the Rural

question 63

Multiple Choice

Diltex Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

• Sales are budgeted at $220,000 for November, $200,000 for December, and $210,000 for January.
• Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible.
• The cost of goods sold is 65% of sales.
• The company desires to have an ending merchandise inventory at the end of each month equal to 50% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $22,500.
• Monthly depreciation is $19,000.
• Ignore taxes.

-The net income for December would be:

• A)$40,400
• B)$22,500
• C)$47,500
• D)$28,500

---

Definitions:

Fixed-position Layout

A manufacturing layout where the product remains stationary, and workers, materials, and equipment are moved to the product site.

Process-oriented Layouts

Facility layouts designed around the sequential order of operations for specific products or product families, often seen in manufacturing settings.

Labour Assignment

The process of allocating human resources to different jobs or tasks within an organization to ensure efficient operation.

Process Layouts

An arrangement of resources in a production facility where similar activities or functions are grouped together, based on the type of process they are involved in.