Jackson Company has budgeted sales for the next five months as follows: Budgeted

Question

 Jackson Company has budgeted sales for the next five months as follows:                    Budgeted Sales in Units             January                6,200 units                               February               4,800 units                               March                  9,100 units                               April                  7,500 units May                    5,300 units                  Jackson's product sells for $18 per unit. Experience has shown that 10% of the company's sales are cash sales and 90% of the company's sales are made on account. On average, 30% of the sales on account are collected in the month of sale, 35% are collected in the month following sale, 20% are collected in the second month following sale, and the remaining 15% is collected three months after the month of sale.  Calculate the total expected cash collections for the month of April.

Explanation / Answer

cash collection in april :

April Cash sales (7500*18*10%) 13500 Cash collection from credit Sales April Credit sales (7500*18*90%*30%) 36450 March credit sales (9100*18*90%*35%) 51597 February credit sales (4800*18*90%*20%) 15552 January credit sales (6200*18*90%*15%) 15066 Total cash collection in april 132165

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