1) For June, Wynn Manufacturing estimated sales revenue at $400,000. It pays sal
ID: 2374378 • Letter: 1
Question
1) For June, Wynn Manufacturing estimated sales revenue at $400,000. It pays sales commissions that are 4% of sales. The sales manager's salary is $190,000, estimated shipping expenses total 1% of sales, and miscellaneous selling expenses are $10,000. How much are budgeted selling expenses for the month of July if sales are expected to be $360,000?
2) Haley Company estimates its sales at 100,000 units in the first quarter and that sales will increase by 10,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.
Cash collections for the third quarter are budgeted at
Explanation / Answer
Answer 1
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Variable Sales cost
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Sales commission=360000 * 4/100=14400
shipping expenses= 360000 * 1/100=3600
Fixed Sales Expenses
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Managers Salary = 190000
Misc. Exp = 10000
Total Budgeted Sales Exepnses= 14400+3600+190000+10000= $ 218000
Answer 2
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Sales of 2nd Quarter = 110000 * 35 =3850000
Cash sales = 3850000 * 40%= 1540000
Credit sales= 3850000-154000=2310000
Cash collected in same quarter= 2310000 * 70%=1617000
Balance to be collected in 3rd Quarter = 2310000 -1617000=693000
Sales of 3rd quarter= 120000 *35= 4200000
Cash sales = 4200000 *40%=1680000
Credit sales=4200000-1680000=2520000
Cash collected in same quarter=2520000 * 70%=1764000
Balance to be collected in 4th Quarter = 2520000 - 1764000= 756000
Budgteded total cash to be collected in 3rd Quarter= 693000+1764000=2457000
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