Chapter 7 Practice Test
Shown below is the sales forecast for Clovercast Inc. for the first four months of the
On average, 50% of credit sales are paid for in the month of the sale, 30% in the month
following sale, and the remainder is paid two months after the month of the sale.
Assuming there are no bad debts, the expected cash inflow in March is:
Paradise Company budgets on an annual basis for its fiscal year.
beginning and ending inventory levels (in units) are planned for the next year.
*Three pounds of raw materials are needed to produce each unit of finished
If Paradise Company plans to sell 480,000 units during the year, the number of units it
would have to manufacture during the year would be:
Berol Company plans to sell 200,000
units of finished product in July and anticipates
a growth rate in sales of 5% per month.
The desired monthly ending inventory in units of
finished product is 80% of the next month’s estimated sales.
There are 150,000 finished
units in inventory on June 30.
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