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    Inventory and accounts receivable planning

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    Douglas Company plans to sell 24,000 units of Product A during July and 30,000 units during August. Sales of Product A during June were 25,000 units. Past experience has shown that end-of -month inventory should equal 3,000 units plus 30% of the next month's sales. On June 3o this requirement was met. Based on these data, how many units of Product A must be produced during the month of July?

    A) 28,800
    B) 22,200
    C) 24,000
    D) 25,800

    Razz Company is estimating the following sales:

    July.............$45,000
    August.........$50,000
    Sept............$65,000
    Oct.............$80,000
    Nov.............$75,000
    Dec............$60,000

    Sales at Razz are normally collected as follows: 10% in the month of sale;60% in the month following the sale; and the remaining 30% in the second month following the sale. In Razz's budgeted balance sheet at December 31, at what amount will accounts receivable be shown?

    a) $49,500
    b) $76,500
    c) $120,500
    d) $135,500

    © BrainMass Inc. brainmass.com June 3, 2020, 7:41 pm ad1c9bdddf
    https://brainmass.com/business/accounts-receivable-management/108640

    Solution Preview

    For Douglas at the end of June, the inventory is calculated as 3,000 units + (24,000 x 30%) = 10,200 units

    For Douglas at the end of July, the ...

    Solution Summary

    The solution projects inventory needs and accounts receivable.

    $2.19

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