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Detroit Manufacturing Company (DMC) has budgeted the following sales for January through May: Credit Sales* January $400,000 February $320,000 March $450,000 April $520,000 May $540,000 Assume DMC has no cash sales. Credit sales are collected 60% in the month of sale, 25% in the month following the sale, and 15% two months following the sale. The gross profit rate is 30%, and desired ending inventory levels are 25% of the next month’s sales at cost. What are the expected cash collections for May? A. $324,000 B. $521,500 C. $365,050 D. $481,000 E. $737,500
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Detroit Manufacturing Company (DMC) has budgeted the following sales for January through May: Credit...
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