Rovniak Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projec

Question

Rovniak Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $896,000 in Octob 70% credit. The company's collection history indicates that credit sales are collected as follows: 25% in the month of the sale 60% in the month after the sale 14% two months after the sale 1% are never collected Requirements 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales 2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales. Rovniak Reeds Sales Budget For the Four Months Ended January October November December January Cash sales Credif sales Enter any number in the edit fields and then continue to the next question. 0 Type here to search

Explanation / Answer

1) Rovniak Reeds Sales Budget For the four months ended January October November December January Cash sales (30%) 268800 286800 321000 280200 Credit sales (70%) 627200 669200 749000 653800 Total sales (100%) 896000 956000 1070000 934000 2) December January Cash sales 321000 280200 Collection of credit sales: 25% of current month credit sales 187250 163450 (749000*25%) (653800*25%) 60% of prior month credit sales 401520 449400 (669200*60%) (749000*60%) 14% of credit sales two months ago 87808 93688 (627200*14%) (669200*14%) Total collection of credit sales 676578 706538 Total cash collections 997578 986738

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