The marketing department of Jessi Corporation has submited the following sales f
ID: 2562245 • Letter: T
Question
The marketing department of Jessi Corporation has submited the following sales forecast for the upcoming fiscal year (all sales are on account) 1st Quarter2nd Quarter 3rd Quarter 4th Quarter 11,200 12.200 14,200 13,200 The selling price of the company's product is S11 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 first quarter, is $70,600 balance of accounts receivable, all of which is expected to be collected in the The company expects to start the first quarter with 1,680 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 1,880 units Required 1-a. Complete the company's sales budget. Jessi Corporation Sales Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted units sales Selling price per unit 1 Total sales 12,200 11S1 11,200 14,200 13,200 50,800 11 $11 123,200 134,200 156,200 145,200 558,800 1-b. Complete the schedule of expected cash collectionsExplanation / Answer
Sales Budget
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Budgeted Unit Sales
11200
12200
14200
13200
50800
Selling price per unit
11
11
11
11
11
Total Sales
123200
134200
156200
145200
558800
Schedule of Expected Cash Collections
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Beginning Accounts Receivable
70600
70600
1st Quarter Sales
80080
36960
6160
123200
2nd Quarter Sales
87230
40260
6710
134200
3rd Quarter Sales
101530
46860
148390
4th Quarter Sales
94380
94380
Total Cash Collections
150680
124190
147950
147950
570770
Production Budget
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Budgeted unit sales
11200
12200
14200
13200
50800
Desired Closing Inventory
1830
2130
1980
1880
1880
Total Needed
13030
14330
16180
15080
52680
Beginning Inventory
1680
1830
2130
1980
1680
Required Production in Units
11350
12500
14050
13100
51000
Sales Budget
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Budgeted Unit Sales
11200
12200
14200
13200
50800
Selling price per unit
11
11
11
11
11
Total Sales
123200
134200
156200
145200
558800
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