Carpon Lumber Sells Lumber and General Building Supplies to Building

question 72

Multiple Choice

Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:

• Sales are budgeted at $340,000 for November, $350,000 for December, and $370,000 for January.
• Collections are expected to be 55% in the month of sale, 44% in the month following the sale, and 1% uncollectible.
• The cost of goods sold is 75% of sales.
• The company desires to have an ending merchandise inventory equal to 60% 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 $21,100.
• Monthly depreciation is $19,000.
• Ignore taxes.

-The accounts receivable balance,net of uncollectible accounts,at the end of December would be:

• A)$154,000
• B)$157,500
• C)$85,500
• D)$303,600

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Definitions:

Convenience

The state of being able to proceed with something with little effort or difficulty, often related to products, services, or processes that save time and reduce effort for consumers.

Product Mix

The complete range of products that a company offers for sale to its customers.

Product Line

A group of related products under a single brand sold by the same company, catering to a particular segment of the market.

Distribution Strategy

Deals with the marketing activities and institutions involved in getting the right good or service to the company’s customers.