Detmer Enterprises has budgeted sales for the next four months as follows: Budge
ID: 2472433 • Letter: D
Question
Detmer Enterprises has budgeted sales for the next four months as follows:
Budgeted Sales in Units January 7,400 units February 5,300 units March 3,900 units April ????? units
Detmer's product sells for $20 each. Experience has shown that 10% of the company's sales are cash sales and 90% of the company's sales are made on account. The sales on account are collected in the pattern 30% in the month of sale, 45% in the month following sale, and 25% is collected in the second month following sale.
Calculate the total expected cash collections for the month of March. Do not use decimals in your answer.
Explanation / Answer
Particulars JAN FEB MAR
Units 7400 5300 3900
Selling price per unit *20 *20 *20
Sales 148000 106000 78000
Cash sales (10%) 14800 10600 7800
Credit sales (90%) 133200 95400 70200
Computation of Expected cash collection for the month of march
Credit sales 133200 95400 70200
Cash collections:
JAN 39960 28620 21060
FEB 59940 42930
MAR 33300
Total cash collections 39960 88560 97290
Total cash collections of march is 97290.