Chapter 8 HW Saved Help The marketing department of Jessi Corporation has submit
ID: 2583819 • Letter: C
Question
Chapter 8 HW Saved Help The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account) 30 points 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 14,000 Budgeted unit sales 12,000 13,000 15,000 01:18:38 The selling price of the company's product is $19 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $72,200 Skipped The company expects to start the first quarter with 2,400 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,600 units. eBook Print References Required 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole Complete this question by entering your answers in the tabs below Required Required 2Required 3 Calculate the estimated sales for each quarter of the fiscal year and for the year as a wholeExplanation / Answer
Solution:
Part 1 – Sales Budget
Sales Budget for the year
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Sales (Units)
12,000
13,000
15,000
14,000
54,000
Per unit selling price (b)
$19
$19
$19
$19
Budgeted Sales Revenue in dollars (a*b)
$228,000
$247,000
$285,000
$266,000
$1,026,000
Part b – Expected Cash Collectionn
Schedule of Expected Cash Collection
Sales
% Collected
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Accounts Receivable Beg. Balance
$72,200
Quarter 1 Sales
$228,000
65%
148,200
Quarter 1 Sales
$228,000
30%
68,400
Quarter 2 Sales
$247,000
65%
$160,550
Quarter 2 Sales
$247,000
30%
$74,100
Quarter 3 Sales
$285,000
65%
$185,250
Quarter 3 Sales
$285,000
30%
$85,500
Quarter 4 Sales
$266,000
65%
$172,900
Total Expected Cash Collection
$220,400
$228,950
$259,350
$258,400
$967,100
Part c --- Required Production in Units of finished goods
Production Budget for the year
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Sales (units)
12,000
13,000
15,000
14,000
Budgeted Finished Goods Ending Inventory (units) (20% of the next quarter's budgeted sales unit)
2,600
(13000*20%)
3,000
(15000*20%)
2,800
(14000*20%)
2,600
(Given)
Required units of available production
14,600
16,000
17,800
16,600
Less: Budgeted Beginning Inventory (Ending Finished Goods Inventory of last month)
2,400
(given)
2,600
(Quarter 1 ending inventory)
3,000
(Quarter 2 ending inventory)
2,800
(Quarter 3 ending inventory)
Units to be produced
12,200
13,400
14,800
13,800
54200
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Sales Budget for the year
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Sales (Units)
12,000
13,000
15,000
14,000
54,000
Per unit selling price (b)
$19
$19
$19
$19
Budgeted Sales Revenue in dollars (a*b)
$228,000
$247,000
$285,000
$266,000
$1,026,000