Questions 34

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37 are based on the following.

ZAPPY is a manufacturer of hand held game cartridges. It divides its market into three main market segments: the Americas, Europe, and Asia. Financial information for this fiscal year is presented below.

Americas Europe Asia

$100,000 $70,000 $90,000

Variable costs

60,000 42,000 54,000

Contribution margin

$40,000 $28,000 $36,000

Direct fixed costs

5,000 4,000 3,000

Direct profit

$35,000 $24,000 $33,000

Allocated homeoffice cost

10,000 7,000 9,000

Segment profit

$25,000 $17,000 $24,000

Note that the direct fixed costs refer to entry costs particular to each market, and these could be eliminated if ZAPPY exits a market. In addition, the homeoffice costs have been allocated to the market segments on the basis of division revenue.Next year, ZAPPY expects sales to be flat in the Americas and in Europe but expects 20 percent growth in Asia.

34.

The average collection period for all sales is 30 days. If all markets realize 40 percent of their total sales during November and December and otherwise accrue sales at an even rate during the year, which of the following will be the accounts receivable balance for the company on June 30 of the next fiscal year?

(A)

$15,600

(B)

$16,680

(C)

$21,616

(D)

$23,161

Please show work for solution.