Super Drive is a computer hard drive manufacturer. The company's balance sheet for the fiscal year ended on November 30 appears below:
Additional information regarding Super Drive's operations appear below:*Sales are budgeted at $£ 520,000$ for December and $£ 500,000$ for the upcoming year.
*Collections are expected to be $60 \%$ in the month of sale and $40 \%$ in the month following sale. There are no bad debts.
*80\% of the disk drive components are purchased in the month prior to the month of the sale, and $20 \%$ are purchased in the month of the sale. Purchased components comprise $40 \%$ of the cost of goods sold.
*Payment for components purchased is made in the month following the purchase.
*Assume that the cost of goods sold is $80 \%$ of sales.
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The budgeted cash collections for the upcoming December should be

A)£208,000.
B)£520,000.
C)£402,000.
D)£462,000.

Question

Super Drive is a computer hard drive manufacturer. The company's balance sheet for the fiscal year ended on November 30 appears below: 
Additional information regarding Super Drive's operations appear below:*Sales are budgeted at $£ 520,000$ for December and $£ 500,000$ for the upcoming year.
*Collections are expected to be $60 \%$ in the month of sale and $40 \%$ in the month following sale. There are no bad debts.
*80\% of the disk drive components are purchased in the month prior to the month of the sale, and $20 \%$ are purchased in the month of the sale. Purchased components comprise $40 \%$ of the cost of goods sold.
*Payment for components purchased is made in the month following the purchase.
*Assume that the cost of goods sold is $80 \%$ of sales.
-
The budgeted cash collections for the upcoming December should be

A)£208,000. 
B)£520,000. 
C)£402,000. 
D)£462,000.

Quizplus · Accepted Answer

Without the specific details of the budget or the assumptions used to calculate the budgeted cash collections, it's impossible to provide a rationale for why £462,000 is the correct answer. Normally, budgeted cash collections are calculated based on expected sales, the timing of cash receipts (including credit sales collections), and any other cash inflows. The correct answer would depend on these details, which are not provided in the question.

Super Drive Is a Computer Hard Drive Manufacturer £520,000£ 520,000£520,000 For December And

Super Drive Is a Computer Hard Drive Manufacturer $£ 520,000$ For December And