The marketing department of Jessi Corporation has submitted the following sales
ID: 2549408 • 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):
The selling price of the company’s product is $13 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 $71,000.
The company expects to start the first quarter with 1,710 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,910 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.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 11,400 12,400 14,400 13,400Explanation / Answer
1) Calculation of Estimated sales (Amounts in $)
2) Calculation of Expected Cash collections (Amounts in $)
3) Calculation of required production in units
Particulars 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Budgeted Sales in units (A) 11,400 12,400 14,400 13,400 51,600 Sale Price per unit (B) $13 $13 $13 $13 $13 Budgeted Sales (A*B) 148,200 161,200 187,200 174,200 670,800Related Questions
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