Blooming Products Inc.sells flower bulbs to local nurseries.Each bag of bulbs sells for $2.The company's accountant has prepared the following sales forecast (in bags)for the fourth quarter of 2009:
$\begin{array}{ll}
\text { October } & 5000 \text { bags } \
\text { November } & 9000 \text { bags } \
\text { December } & 8000 \text { bags }
\end{array}$
Historically,the cash collection of sales has been as follows: 50 per cent in the month of sale,40 per cent in the month following sale,and 10 per cent in the second month following sale.
Cash receipts for December are expected to be:
A) $13 800
B) $ 8000
C) $16 200
D) $ 8100

Question

Quizplus · Accepted Answer

To calculate the December cash receipts, we need to first calculate the total sales made in October, November, and December.

Total sales in October = 300 bags 
Total sales in November = 500 bags 
Total sales in December = 600 bags

Total sales in Q4 = 300 + 500 + 600 = 1400 bags

Now, we can calculate the expected cash receipts for December as follows:

50% of October sales = 0.5 * 300 * $2 = $300 
40% of November sales = 0.4 * 500 * $2 = $400 
10% of December sales = 0.1 * 600 * $2 = $120

Total expected cash receipts for December = $300 + $400 + $120 = $820

Therefore, the best choice is C, which is $16,200.

Blooming Products Inc Historically,the Cash Collection of Sales Has Been as Follows: 50