Nuthatch Corporation began its operations on September 1 of the current year. Bu

Question

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $375,000, and $400,000, respectively, for September, October, and November. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in October from accounts receivable are estimated to be Select one: a. $210,000 b. $294,500 c. $246,400 d. $262,500 Production and sales estimates for June are as follows: Estimated inventory (units), June 1 20,000 Desired inventory (units), June 30 19,000 Expected sales volume (units): Area X 7,000 Area Y 4,000 Area Z 5,500 Unit sales price $20 The number of units expected to be manufactured in June is Select one: a. 11,000 b. 12,500 c. 13,500 d. 15,500

Explanation / Answer

cash collections expected in October from accounts receivable are = (260000 * 70% * 20%) + (375000* 70% * 80%) =$246400 (option c)

units expected to be manufactured = (closing balance + sales) - opening balance = (19000 + 7000 + 4000 + 5500) - 20000 = 15500 units (option d)

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.