Chief Industries expects sales of $720, $680, $750, and $800 for the months of May through August, respectively. The firm collects 10% of sales in the month of sale, 60% in the month following the month of sale, and 27% in the second month following the month of sale. The remaining 3% of sales is never collected. How much money does the firm expect to collect in the month of July?

Question

Quizplus · Accepted Answer

Chief Industries expects to collect 10% of August sales, or $80, in July. The firm also expects to collect 60% of July sales, or $408, and 27% of June sales, or $189, in July. Therefore, the firm expects to collect a total of $80 + $408 + $189 = $677.40 in the month of July.

Chief Industries Expects Sales of $720, $680, $750, and $800