ABC Company’s budgeted sales for June, July, and August are 12,600, 16,600, and
ID: 2469892 • Letter: A
Question
ABC Company’s budgeted sales for June, July, and August are 12,600, 16,600, and 14,600 units. The selling price for each unit is $16. Based on past experience, ABC expects that 25% of a month’s sales will be collected in the month of sale, 70% in the following month, and 3% in the second month following the sale.
August collections
Current months sales
ABC Company’s budgeted sales for June, July, and August are 12,600, 16,600, and 14,600 units. The selling price for each unit is $16. Based on past experience, ABC expects that 25% of a month’s sales will be collected in the month of sale, 70% in the following month, and 3% in the second month following the sale.
Explanation / Answer
June July August Budgeted sale units 12600 16600 14600 Unit selling price 16 16 16 Budgeted sales revenue 201600 265600 233600 August collections current month sales 58400 [233600*.25] Prior month sales 185920 [265600*.70] second prior month sales 6048 [201600*.03] Total collections 250,368