Production and sales estimates for June are as follows: Estimated inventory (uni

Question

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

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

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

Explanation / Answer

Units Expected to be manufactured Total Sales Area X 7000 Y 4000 Z 5500 Total 16500 Units to be manufactured = Sales+ Closing- opening 16500+19000-20000 Units to be manufactured = 15500 The correct option is d. 15500 2 Cash Collections in october Cash Sales Credit Sep Oct Nov September 260000 78000 182000 36400 October 375000 112500 262500 210000 November 400000 120000 280000 Total 246400 The cash collections expected in October from accounts receivable are estimated to be $246,400 The correct answer is C. $ 246400

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