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Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $247,000, $300,000, and
Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $247,000, $300,000, and $417,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections expected in October are Oa. $217,400 Ob. $266,800 Oc. $288,075 Od. $277,400 Starling Co. is considering disposing of a machine with a book value of $20,700 and estimated remaining life of five years. The old machine can be sold for $5,400. A new high-speed machine can be purchased at a cost of 68,700. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,500 to $20,400 if the new machine is purchased. The five-year differential effect on profit from replacing the machine is a(n) Oa. increase of $47,800 Ob. increase of $62.140 Oc. decrease of $62,140 Od. decrease of $47,800
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