Question

Exercise 8-14 Sales and Production Budgets (LO8-2, LO8-3] The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 2nd Quarter 11,200 12,200 3rd Quarter 4th Quarter 14,200 13,200 Budgeted unit sales The selling price of the company's product is $11 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 $70,600. The company expects to start the first quarter with 1,680 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,880 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total cash collections Required 1 Required 3 >

Answer 1

1. Estimated sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 11,200 12,200 14,200 13,200 $ 11 $ 11$ 11 $ 11 $ 123,200 $ 134,200 $ 156,200 $ 145,200 Year 50,800 Budgeted units sales Selling price Budgeted sales $ $ 558,800 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 | $ 70,600 | $ 123,200 $ 80,080 $ 24,024 $ 134,200 $ 87,230 $ 40,260 $ 156,200 $ 101,530 $ 46,860 $ 145,200 $ 94,380 $ | $ 150,680 $ 111,254 $ 141,790 $ 141,240 $ Year 70,600 104,104 (Sales * 65%) & (Sales * 30%) 127,490 (Sales * 65%) & (Sales * 30%) 148,390 (Sales * 65%) & (Sales * 30%) 94,380 (Sales * 65%) 544,964 Budgeted unit sales Add: Desired ending inventory Total needs Less: Beginning inventory Production Budget (units) 3. Production Budget 1st Quarter 2nd Quarter 3rd Quarter | 4th Quarter 11,200 12,200 14,200 13,200 1,830 2,130 1,980 1,880 13,030 14,330 16,180 15,080 1,680 1,830 2,130 1,980 11,350 12,500 14,050 13,100 Year 50,800 1,880 (15% of next quarters budgeted units sales) 52,680 1,680 51,000