Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. varmit-b-gone is a pest control service that opera

Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to...

Free

50.1K

Verified Solution

Question

Accounting

Varmit-B-Gone is a pest control service that operates in asuburban neighborhood. The company attempts to make service callsat least once a month to all homes that subscribe to its service.It makes more frequent calls during the summer. The number ofsubscribers also varies with the season. The number of subscribersand the average number of calls to each subscriber for the monthsof interest follow:

SubscribersService calls (per subscriber)
March4500.6
April5500.8
May1,5001.4
June1,6502.6
July1,6503.3
August1,4002.8


The average price charged for a service call is $60. Of the servicecalls, 30 percent are paid in the month the service is rendered, 60percent in the month after the service is rendered, and 8 percentin the second month after. The remaining 2 percent isuncollectible.


Required:

What are Varmit-B-Gone’s expected cash receipts for May, June,July, and August?

Answer & Explanation Solved by verified expert
3.7 Ratings (509 Votes)

Calculation of revenue:

Month Calculation Revenue
March 0.6 calls * 450 subscribers * $60 $16,200
April 0.8 calls * 550 subscribers * $60 $26,400
May 1.4 calls * 1500 subscribers * $60 $126,000
June 2.6 calls * 1650 subscribers * $60 $257,400
July 3.3 calls * 1650 subscribers * $60 $326,700
August 2.8 calls * 1400 subscribers * $60 $235,200

Collection schedule:

May June July August
March sales $1,296
($16,200 * 8%)
April sales $15,840 $2,112
($26,400 * 60%) ($26,400 * 8%)
May sales $37,800 $75,600 $10,080
($126,000 * 30%) ($126,000 * 60%) ($126,000 * 8%)
June sales $77,220 $154,440 $20,592
($257,000 * 30%) ($257,000 * 60%) ($257,000 * 8%)
July sales $98,010 $196,020
($326,700 * 30%) ($326,700 * 60%)
August sales $70,560
($235,200 * 30%)
Total cash receipt $54,936 $154,932 $262,530 $287,172

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

Discuss and explain the difference between profit/loss and cash flow. How could a company have positive...

Finance
1.2K views

What are flotation costs and why they must be included in the initial cost of a...

Advance Math
1.2K views

Find the dimensions of the following linear spaces. (a) The space of all 3×4 matrices (b) The...

Chemistry
1.2K views

Predict the major products from the treatment of acetone with the following: (a) [H+], NH3, (-H2O) (b) [H+],...

Advance Math
1.2K views

The software application development company for which you work is evaluating two different options for starting...

Physics
1.2K views

Identify the correct statements regarding power MOSFET You can select multiple correct options Power MOSFET...

Basic Math
1.2K views

Previous Problem Problem List 11 10 9 8 7 6 5 1 point Express the...

Basic Math
1.2K views

Write the Indo Arabic equivalent for the following OA 134 OB 3674 OC 3610 D...

Statistics
1.2K views

togram of a sample from a population with a skewed distribution one is the distribution...

Accounting
1.2K views

Rundle Services Company has 53 employees, 36 of whom are assigned...

Accounting
1.2K views

12. Brad, who would otherwise qualify as Fayes dependent, had gross income of $9,000 during...

Accounting
1.2K views

At the end of the most current year, B&B reported the following key performance indicators:...