The Khaki Corporation Has the Following Budgeted Sales Data

question 160

Multiple Choice

The Khaki Corporation has the following budgeted sales data: The regular pattern of collection of credit sales is 40% in the month of sale,50% in the month following sale,and the remainder in the second month following the month of sale.There are no bad debts. The budgeted accounts receivable balance on February 28 would be:

• A)$250,000
• B)$210,000
• C)$175,000
• D)$215,000

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Definitions:

Sales

The total income a company generates from selling its goods or services.

Margin of Safety Percentage

The ratio that indicates how much sales can decline before a business reaches its break-even point.

Total Sales

The aggregate revenue generated from all goods and services sold by a company within a specific period.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, used to cover fixed costs and generate profit.