Question

"On August 5, 2018, Famous Furniture shipped 40 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $350 each. The cost of shipping the dining sets amounted to $3,600 and was paid for by Famous Furniture. On December 30, 2018, the consignee reported the sale of 30 dining sets at $850 each. The consignee remitted payment for the amount due after deducting a 6% commission, advertising expense of $600, and installation and setup costs of $780. The amount cash received by Famous furniture is"

Answer 1

The correct answer is $22,590.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Sale value = $850

Sale unit = 30 units

So, Total sale value = $850 × 30 = $ 25,500

Now, Commission on sale = $25,500 × 6% = $1,530

So, we can calculate the amount cash received by famous furniture by using following formula:

Cash received = Total sale value - Commission value - Advertising cost - Setup cost

= $25,500 - $1,530 - $600 - $780

= $22,590