The marketing department of Jessi Corporation has submitted the following sales
ID: 2509175 • Letter: T
Question
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 14,200 Budgeted unit sales 12,200 13,200 15,200 The selling price of the company's product is $21 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% 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 $72,600. The company expects to start the first quarter with 2,440 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 2,640 units. Required 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.Explanation / Answer
1.
1st quarter
2nd quarter
3rd quarter
4th quarter
Year
Budgeted units sales
12200
13200
15200
14200
54800
Selling price per unit
$21
21
21
21
21
Total sales
$256200
$277200
$319200
$298200
$1150800
2.
1st quarter
2nd quarter
3rd quarter
4th quarter
Year
Beginning accounts receivable
$72600
$72600
1st Quarter sales
166530
76860
243390
2nd Quarter sales
180180
83160
263340
3rd Quarter sales
207480
95760
303240
4th Quarter sales
193830
193830
Total cash collections
$239130
$257040
$290640
$289590
$1076400
3.
1st quarter
2nd quarter
3rd quarter
4th quarter
Year
Budgeted unit sales
12200
13200
15200
14200
54800
Add: Desired units of ending finished goods inventory
2640
3040
2840
2640
2640
Total needs
14840
16240
18040
16840
57440
Less: Units of beginning finished goods inventory
2440
2640
3040
2840
2440
Required production in units
12400
13600
15000
14000
55000
1st quarter
2nd quarter
3rd quarter
4th quarter
Year
Budgeted units sales
12200
13200
15200
14200
54800
Selling price per unit
$21
21
21
21
21
Total sales
$256200
$277200
$319200
$298200
$1150800
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