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Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to grow by 3%. Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of
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30 votes
Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to grow by 3%. Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales in dollars. Assume 30% of Zhang's sales are for cash. The remaining 70% are credit sales; these customers pay in the month following the sale. Compute the budgeted cash receipts for June.Multiple Choice$282,520.$196,000.$280,000.$201,880.$285,880.

User Tonni Larsen SONY
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13 votes
13 votes

Answer:

Total cash collection= $282,520

Step-by-step explanation:

Giving the following information:

Sales May= 400 units

Sales June= 400*1.03= 412 units

Selling price= $700

30% of Zhang's sales are for cash.

The remaining 70% are credit sales; these customers pay in the month following the sale.

To calculate the cash receipts, we need to use the following structure:

Cash collection June:

Sales in Cash June= (412*700)*0.3= 86,520

Sales in Account from May= (400*700)*0.7= 196,000

Total cash collection= $282,520

User Tim Rogers
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