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Fact Pattern: Karmee Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Karmee's sales for the first 6

image text in transcribed Fact Pattern: Karmee Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Karmee's sales for the first 6 months of the coming year are as follows: Karmee's cost of goods sold averages 40% of the sales value. Karmee's objective is to maintain a target inventory equal to 30% of the next month's sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other than cost of goods sold) for Karmee are 10% of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July, and October. Property taxes are paid twice a year in April and October. The amount of cash collected in March for Karmee Company from the sales made during March will be A. $308,000 B. $140,000 C. $636,000 D. $350,000

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