The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal wear (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,800 13,800 15,800 14,800 Budgeted unit sales. The selling price of the company's product is $27 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 $73,800. The company expects to start the first quarter with 2,560 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 2,760 units. 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.
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal wear (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,800 13,800 15,800 14,800 Budgeted unit sales. The selling price of the company's product is $27 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 $73,800. The company expects to start the first quarter with 2,560 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 2,760 units. 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.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal
year (all sales are on account):
Budgeted unit sales.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
12,800
13,800
15,800
14,800
The selling price of the company's product is $27 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 $73,800.
The company expects to start the first quarter with 2,560 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 2,760 units.
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.
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