Question

PLEASE ANSWER ALL PARTS OF THE QUESTION

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 13,000 14,000 16,000 15,000 The selling price of the company's product is $29 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 $74,200. The company expects to start the first quarter with 2,600 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 2,800 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.

Answer 1

Budgeted units sales Selling price Budgeted sales 1. Sales Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 13,000 14,000 16,000 15,000 58,000 $ 29 | $ 29$ 29 | $ 29 $ 29 $ 377,000 $ 406,000 $ 464,000 $ 435,000 $1,682,000 Beginning accounts receivable 1st Quarter sales 2nd Quarter sales 3rd Quarter sales 4th Quarter sales Total cash collections $ $ $ $ 2. Expected cash collections Sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year $ 74,200 $ 74,200 377,000 $ 245,050 $ 73,515 $ 318,565 (Sales * 65%) & (Sales * 30%) 406,000 $ 263,900 $ 121,800 $ 385,700 (Sales * 65%) & (Sales * 30%) 464,000 $ 301,600 $ 139,200 $ 440,800 (Sales * 65%) & (Sales * 30%) 435,000 $ 282,750 $ 282,750 (Sales *65%) $ 319,250 $ 337,415 $ 423,400 $ 421,950 $ 1,502,015 Budgeted unit sales Add: Desired ending inventory Total needs Less: Beginning inventory Required Production in units 3. Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 13,000 14,000 16,000 15,000 2,800 3,200 3,000 2,800 15,800 17,200 19,000 17,800 2,600 2,800 3,200 3,000 13,200 14,400 15,800 14,800 Year 58,000 2,800 (20% of next quarters budgeted units sales) 60,800 2,600 58,200