Cicero Manufacturing Inc. sells gloves at local ski resorts during the winter mo
ID: 2343619 • Letter: C
Question
Cicero Manufacturing Inc. sells gloves at local ski resorts during the winter months. Each pair of gloves sells for $15. The following sales forecast (in units) has been prepared for October 2008 through March 2009:October
500
November
800
December
1,000
January
1,200
February
900
March
600
Historically, the cash collection of sales has been as follows: 60 percent in the month of sale, 35 percent in the month following sale, and 4 percent in the second month following sale. The remaining 1 percent is uncollectible.
Cash receipts for January are expected to be:
Answer
a. $13,170
b. $10,800
c. $51,975
d. $16,530
Explanation / Answer
c. $51,975