Question

A company collects​ 25% of its sales during the month of​ sale, 65% one month after the​ sale, and​ 10% two months after the sale. The company expects sales of​ $50,000 in​ August, $80,000 in​ September, $90,000 in​ October, and​ $60,000 in November. How much money is expected to be collected in​ October? A. ​$22,500 B. ​$79,500 C. ​$90,000 D. ​$55,000

Answer 1

B. ​$79,500

Step-by-step explanation:

Since the company collects​ 25% of its sales during the month of​ sale,

From sales made in October, it will collect;

25% of $90,000

0.25 × 90000 = $22,500

Since it collects 65% of its sales one month after the​ sale, therefore 65% of sales made in September will be collected in October:

September sale = $80,000

65% = 0.65 × 80000 = $52,000 (to also be collected in October)

Since the company also collects 10% of sales, two months after the sale, then it will collect 10% of August sales in October.

August sale = $50,000

10% = 0.10 × 50000 = $5,000 (to also be collected in October)

Therefore the total amount the company will expect to collect in October is:

$22,500 + $52,000 + $5,000 = $79,500

Answer 2

$79,500

Step-by-step explanation:

According to the company's sales collection pattern, in October it will collect 10% of the August sales, 65% of the September sales and 25% of the October sales. Money collected in October (M) is:

`M= (0.10*\$50,000)+(0.65*\$80,000)+(0.25*\$90,000)\\M=\$79,500`

$79,500 are expected to be collected in​ October.