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 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. In July, the firm will collect 60% of June's sales and 27% of May's sales. June's sales were $680, so the firm will collect 0.60 * $680 = $408 from June's sales in July. May's sales were $720, so the firm will collect 0.27 * $720 = $194.40 from May's sales in July. Therefore, the firm expects to collect a total of $408 + $194.40 = $602.40 in July.

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