The marketing department of Graber Corporation has submitted the following sales
ID: 2449351 • 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 $23.00 per unit. Management expects to collect 70% of sales in the quarter in which the sales are made, 20% in the following quarter, and 10% 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 $64,000. The company expects to start the first quarter with 1,950 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,150 units. Compute the company's total sales. Complete the schedule of expected cash collections. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.) Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values. Do not round intermediate calculations.)Explanation / Answer
Solution :
1a company's total sales
Q1
Q2
Q3
Q4
Year
budgeted units
13000
12000
11000
12000
48000
x selling price per unit
23
23
23
23
23
TOTAL SALES
299000
276000
253000
276000
1104000
1b expected cash collection schedule
Q1
Q2
Q3
Q4
YEAR
ACCOUNTS RECEIVABLE, BEGINING BALANCE
64000
64000
Q1 SALES
209300
59800
269100
Q2 SALES
193200
55200
248400
Q3 SALES
177100
50600
227700
Q4 SALES
193200
193200
TOTAL CASH COLLECTION
273300
253000
232300
243800
1002400
2. Production budget
Q1
Q2
Q3
Q4
YEAR
Budgeted units sales
13000
12000
11000
12000
48000
Add :ending inventory (15% of next quarter sales)
1800
1650
1800
7200
12450
Less :Begining inventory
1950
1800
1650
1800
7200
Required Production
12850
11850
11150
17400
53250
1a company's total sales
Q1
Q2
Q3
Q4
Year
budgeted units
13000
12000
11000
12000
48000
x selling price per unit
23
23
23
23
23
TOTAL SALES
299000
276000
253000
276000
1104000
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