Cicero Manufacturing Inc. sells gloves at local ski resorts during the winter mo

Question

Cicero Manufacturing Inc. sells gloves at local ski resorts during the winter months. Each pair of gloves sells for $15. The following sales forecast (in units) has been prepared for October 2008 through March 2009:

October
500
November
800
December
1,000
January
1,200
February
900
March
600
Historically, the cash collection of sales has been as follows: 60 percent in the month of sale, 35 percent in the month following sale, and 4 percent in the second month following sale. The remaining 1 percent is uncollectible.

Cash receipts for January are expected to be:
Answer
a. $13,170
b. $10,800
c. $51,975
d. $16,530

Explanation / Answer

c. $51,975

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