Detmer Enterprises has budgeted sales for the next four months as follows: Budge

Question

 Detmer Enterprises has budgeted sales for the next four months as follows: 

                   Budgeted Sales in Units January                7,400 units                               February               5,300 units March                  3,900 units April                  ????? units 

 Detmer's product sells for $20 each.  Experience has shown that 10% of the company's sales are cash sales and 90% of the company's sales are made on account. The sales on account are collected in the pattern 30% in the month of sale, 45% in the month following sale, and 25% is collected in the second month following sale. 

 Calculate the total expected cash collections for the month of March. Do not use decimals in your answer. 

Explanation / Answer

Particulars JAN FEB MAR

Units 7400 5300 3900

Selling price per unit *20 *20 *20

Sales 148000 106000 78000

Cash sales (10%) 14800 10600 7800

Credit sales (90%) 133200 95400 70200

Computation of Expected cash collection for the month of march

Credit sales 133200 95400 70200

Cash collections:

JAN 39960 28620 21060

FEB 59940 42930

MAR 33300

Total cash collections 39960 88560 97290

Total cash collections of march is 97290.

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

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