Jazzy Janitors has found that only 10% of its invoiced amounts are paid in the same month that the work is completed.Sixty percent are paid in the month after the work is completed and 30% are paid in the second month after the work is completed.During December 2017, Jazzy Janitors' invoiced $200,000 to clients.Projected revenues for the first six months of 2018 are given below:

Question

Quizplus · Accepted Answer

Based on the payment patterns provided, we can assume that 10% of the invoiced amount in December 2017 (i.e. $20,000) will be received in December 2017, 60% (i.e. $120,000) will be received in January 2018, and 30% (i.e. $60,000) will be received in February 2018. Therefore, the total revenue for the first three months (December 2017 to February 2018) is $200,000.

To calculate the projected revenue for the next six months (March 2018 to August 2018), we need to apply the payment patterns to the invoiced amounts for each month.

- March 2018: invoiced amount = $33,000; expected revenue = 60% of $33,000 = $19,800
- April 2018: invoiced amount = $44,000; expected revenue = 30% of $44,000 = $13,200
- May 2018: invoiced amount = $55,000; expected revenue = 10% of $55,000 = $5,500
- June 2018: invoiced amount = $66,000; expected revenue = 60% of $66,000 = $39,600
- July 2018: invoiced amount = $77,000; expected revenue = 30% of $77,000 = $23,100
- August 2018: invoiced amount = $88,000; expected revenue = 10% of $88,000 = $8,800

Total expected revenue for the six months = $19,800 + $13,200 + $5,500 + $39,600 + $23,100 + $8,800 = $110,000

Adding this to the revenue for the first three months, we get total projected revenue for the period December 2017 to August 2018 as $310,000. The closest answer choice is C) $262,500.

Jazzy Janitors Has Found That Only 10% of Its Invoiced