Milford Company has the following sales projection (in units) for the next six m
ID: 2520712 • Letter: M
Question
Milford Company has the following sales projection (in units) for the next six months:
Feb: 2100
Mar: 2300
Apr: 1900
May: 2600
Jun: 2200
Jul: 1700
Each unit sells for $37 through April and $42 starting in May.
Milford has prepared the following sales budget for the quarter of April, May and June:
All of the sales are on credit. Cautious collects from customers as follows:
50% of sales in the month of sale
30% in the month following the sale, and
20% in the second month following the sale
Prepare a cash receipts budget for the quarter of April, May and June.
What is budgeted cash receipts May?
Explanation / Answer
Answer 1. Sales Budget April May June Total Feb March Sales in Units 1,900.00 2,600.00 2,200.00 6,700.00 2,100.00 2,300.00 Sp Per Unit 37.00 42.00 42.00 37.00 37.00 Total Sales in $ 70,300.00 109,200.00 92,400.00 271,900.00 77,700.00 85,100.00 Schedule of Expected Cash Collections from Sales April May June Total Collection from Accounts Receivables Feb Sales 17,020.00 17,020.00 Mar Sales 25,530.00 17,020.00 42,550.00 Apr Sales 35,150.00 21,090.00 14,060.00 70,300.00 May Sales 54,600.00 27,720.00 82,320.00 Jun Sales 46,200.00 46,200.00 Total cash Collections 77,700.00 92,710.00 87,980.00 258,390.00 Budgeted Cash receipts May 92,710.00