The marketing department of Jessi Corporation has submitted the following sales

Question

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): Budgeted unit sales11,000 12,000 14,000 13,000 The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% inthe 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 $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted for the fourth quarter is 1,850 units. Required: 1-a. Compute the company's total sales. Jessi Corporation Sales Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Qurter Year Budgeted units sales Selling price per unit Total sales

Explanation / Answer

Answer = 1 a) CALCULATION OF THE COMPANIES TOTAL SALES SALES BUDGET 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUAERTER Budgeted Sales Units 11000 12000 14000 13000 Selling price per unit $                         18 $                           18 $                                 18 $                                18 Total Sales $             1,98,000 $               2,16,000 $                     2,52,000 $                    2,34,000 Answer = 1 b) CALCULATION OF THE EXPECTED CASH COLLECTION Amount 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUAERTER Beginning Account Receivable $                 70,200 $                  60,171 1st Quarter Sales $             1,98,000 $               1,28,700 $                         59,400 2nd Quarter Sales $             2,16,000 $                     1,40,400 $                       64,800 3rd Quarter Sales $             2,52,000 $                    1,63,800 $                 75,600 4th Quarter Sales $             2,34,000 $             1,52,100 Total $               1,88,871 $                     1,99,800 $                    2,28,600 $             2,27,700 Beginning balance of $ 70,200 is balance of 35% last quarter sales So Sales =$ 70,200 X 100 /35) $             2,00,571 Collection = 30% of the sAles= $                 60,171 Answer = 1 C) Calculation of Production budget 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUAERTER Units Units Units Units Production Budget (a) 11000 12000 14000 13000 Desired ending invetory(b) 1800 2100 1950 1850 (15% 0f next months expecting unit Sales) (For first three 15% of next quarter) (Given) Total Production Required (a+b) 12800 14100 15950 14850 Less: Opening Inventory 1650 1800 2100 1950 (given) (Cl of 1st Quart) (Cl of 2nd Quart) (Cl of 3rd Quart) Units to Be Manuafatured 11150 12300 13850 12900

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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