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Dominik [7]
3 years ago
7

Ingraham Inc. currently has $320,000 in accounts receivable, and its days sales outstanding (DSO) is 63 days. It wants to reduce

its DSO to 25 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 20%. What will be the level of accounts receivable following the change
Business
1 answer:
TEA [102]3 years ago
7 0

Answer:

$44,186

Explanation:

Days sales outstanding can be expressed as the following financial ratio:

DSO ratio = accounts receivable / average sales per day, or.

DSO ratio = accounts receivable / (annual sales / 365 days)

Hence revised receivables / ( revised sales /365 ) will be our preferred formula for this scenario

Revised sales = 80% of current sales which is 0.8 x 320,000 = 256,000

daily sales = 256,000 / 365 = 701.3

revised receivables / 701.3 = 63 days as given in the question.

Revised receivables = 701.3 x 63 = $44,186

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Who pays the tax does NOT depend on who write the check to the government.
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4 0
3 years ago
Marigold Corp. has the following inventory data: July 1 Beginning Inventory 31 units at $16 $496 7 Purchases 109 units at $16 17
Mrac [35]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

July 1: Beginning Inventory 31 units at $16 $496

July 7: Purchases 109 units at $16 $1744

July 22: Purchases 16 units at $17 $272

A physical count of merchandise inventory on July 30 reveals that there are 39 units on hand.

FIFO (first-in, first-out)

Units sold= (31 + 109 + 16) - 39= 117

COGS= 31*16 + 86*16= $1,872

7 0
3 years ago
The restaurant's total cost is a mixed cost that depends on customers served. The restaurant's management uses the high-low meth
harina [27]

Answer:

$29,390

Explanation:

For computing the total cost first we have to determine the variable cost per customer and the fixed cost which is shown below:

Variable cost Per Customer is

= (High total cost - low total cost) ÷ (high number of customer served - low cost of customer served)

= ($28,934 - $28,241) ÷ (14,100 - 11,214)

= $0.24

Now

Fixed cost is

= High cost - (high number of customer served × variable cost per customer)

= 28,934 - (14,100 × 0.24)

= $25,550

So, the total cost for 16,000 customers is

= Fixed cost + variable cost

= $25,550 + (16,000 × $0.24)

= $29,390

7 0
3 years ago
Flexible budgets and variance analysis are very useful tools for managers, but are sometimes difficult to understand. Find an on
Anettt [7]

Answer:

Flexible budgets: These type of budgets are assessments, which may vary with the capacity or production for a given period.

Say for model there might be two type of budgets which bend with two or three situations of fabrication volume or production. The situations might be:

1. Budget when fabrication is at highest volume, the revenue and expenditures at the utmost output.

2. Budget when there is prime capacity, the revenue and expenditures valued at the optimal application of resources to produce optimal productivity or satisfactory output.

3. Budget when there is low capacity or demand is nearly nil, the revenues and expenditures that will be valued.

This flexible budget guides administration to appropriately plan their resources and flex with the capacity whenever it’s required subject the change in situations.

Variance Analysis: The investigation of deviance of several cost restriction with the usual set in at the start of the year results in Variance Analysis. There are several types of modifications which needs analysis and these will be diverse with the business type. The below are few common instances of modifications.

Sales capacity variances, sales combination variances, Material value variances, labor proportion variances, machine dependent price variances, overheads expenditure variances, Material procedure, Material Amount, Material replacement, labor and engine time variances etc.

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5 0
2 years ago
Patterson Co. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's NPV?
diamong [38]

Answer:

NPV= $60.52

Explanation:

Giving the following information:

Robbins Inc. is considering a project that has the following cash flow: −$950 $500 $400 $300

Cost of capital= 10.00%

To calculate the net present value we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

For example= Year 3: 300/1.10^3= 225.39

NPV= $60.52

8 0
3 years ago
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