The Fraley Corporation, a merchandising firm, has planned the following sales fo

Question

The Fraley Corporation, a merchandising firm, has planned the following sales for the next four months: 6· March Apri My June July Sales in units 5,000 7,000 9,000 6,000 8,000 10 Sales price/unit 10 10 10 10 Total budgeted sales $50,000 $70,000 $90,000 $60,000 $80,000 From experience, the company has learned that a month's sales on account are collected according to the following pattern: Month of sale First month following month of sale 60% | 35% 5% Uncollectible Fraley likes to maintain a finished goods inventory equal to 10% of the next month's estimated sales. Required: 1. Compute the budgeted cash receipts for May. 2. Compute the budgeted product budget for May.

Explanation / Answer

1.the following is the budgeted cash receipts for may:

2.Product budget for may:

may sales collected in may ($90,000 * 60%) $54,000 April sales collected in may ($70,000 * 35%) $24,500 budgeted cash receipts for may $78,500

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