The marketing department of Graber Corporation has submitted the following sales
ID: 2448797 • Letter: T
Question
The marketing department of Graber Corporation has submitted the following sales forecast for the upcoming fiscal year. The selling price of the company's product is $24.00 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $68,000. The company expects to start the first quarter with 3,600 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 3,800 units. Required: la. Compute the company's total sales. 1b. Complete the schedule of expected cash collections. (Do not round intermediate calculations.)Explanation / Answer
Sales Budget 1st Quarter 2nd Quarter 3rd quarter 4th Quarter Year budgeted sales in units 18,000.0 17,000.0 16,000.0 17,000.0 68,000.0 sales price per unit $ 24 $ 24 $ 24 $ 24 $ 24 Total sales $ 432,000 $ 408,000 $ 384,000 $ 408,000 $ 1,632,000 Schedule of expected cash collection 1st Quarter 2nd Quarter 3rd quarter 4th Quarter Year Beginning accounts receivable $ 68,000 $ 68,000 1st Quarter $ 324,000 $ 86,400 $ 410,400 2nd Quarter $ 306,000 $ 81,600 $ 387,600 3rd quarter $ 288,000 $ 76,800 $ 364,800 4th Quarter $ 306,000 $ 306,000 Total cash collections $ 392,000 $ 392,400 $ 369,600 $ 382,800 $ 1,536,800
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