Question

TB MC Qu. 8-112 Sevenbergen Corporation makes one product ...

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:

Budgeted selling price per unit	$	92
Budgeted unit sales (all on credit):
July		9,000
August		11,300
September		10,400
October		10,800

Raw materials requirement per unit of output		4	pounds
Raw materials cost	$	1.00	per pound
Direct labor requirement per unit of output		2.8	direct labor-hours
Direct labor wage rate	$	22.00	per direct labor-hour
Variable selling and administrative expense	$	1.50	per unit sold
Fixed selling and administrative expense	$	70,000	per month

Credit sales are collected:

40% in the month of the sale

60% in the following month

Raw materials purchases are paid:

30% in the month of purchase

70% in the following month

The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month’s raw materials production needs.

The expected cash collections for August is closest to:

Answer 1

The expected Cash Collection for August is closest to $912640.

Detail working for refrence

Cash Collection
	Jul	Aug	Sep
Sales (a)	$828,000.00	$1,039,600.00	$956,800.00
40% collected in month of sale	$331,200.00	$415,840.00	$382,720.00
60% percent collected in first month after sales		$496,800.00
Total cash collections	$331,200.00	$912,640.00	$382,720.00