Shadee Corp. expects to sell 570 sun visors in May and 330 in June. Each visor s

Question

Shadee Corp. expects to sell 570 sun visors in May and 330 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 85 and 45 units, respectively. Ending finished goods inventory for June will be 65 units.

It expects the following unit sales for the third quarter:

July: 530
August: 450
September: 450

Sixty percent of Shadee’s sales are cash. Of the credit sales, 50 percent is collected in the month of the sale, 37 percent is collected during the following month, and 13 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. Do not round calculations, round answer to nearest whole number.

Explanation / Answer

WN 1 : Computation of Sales Amount  

Computation of  total cash receipts for August and September

Month July ($) August ($) September ($) Total Sales ( units sold * per unit cost) (530 * $16) = 8,480 (450* $16) = 7,200 (450* $16) = 7,200 Total cash sales ( Total Sales * 60 %) (8,480 * 60 %) = 5,088 (7,200 * 60 %) = 4,320 (7,200 * 60 %) = 4,320 Total credit sales (Total Sales * 40 %) (8,480 * 40 %) = 3,392 (7,200 * 40 %) = 2,880 (7,200 * 40 %) = 2,880

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