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) Budgeted unit sales ist Quarter i 11, bee nd Quarter 12,6ee 3rd Quarter4th Quarter 14,6ee 13,689 The selling price of the company's product is $15 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 $71.400. The company expects to start the first quarter with 1,740 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 1.940 units. Required: 1. Calculate the estimated sales for each cuarter 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 estimated sales for each quarter of the fiscal year and for the year as a whole. 2nd Quarter 4. Qua 2 >

Answer 1

Required 1 :
	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Budgeted unit sales	11,600	12,600	14,600	13,600	52,400
(*) Selling price per unit	$                  15	$                      15	$                      15	$              15	$                15
Total sales	$       174,000	$            189,000	$            219,000	$    204,000	$     786,000

Required 2 :
	Schedule of expected cash collection
	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Beginning accounts receivables	$          71,400
1st quarter sales	$       113,100	$              52,200
2nd quarter sales		$            122,850	$              56,700
3rd quarter sales			$            142,350	$      65,700
4th quarter sales				$    132,600
Total cash collection	$       184,500	$            175,050	$            199,050	$    198,300	$     756,900

Required 3 :
	Production budget
	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Budgeted unit sales	11,600	12,600	14,600	13,600	52,400
(+) Desired ending finished goods inventory ( 15% of next quarter's budgeted sales )	1,890	2,190	2,040	1,940	1,940
Total needs	13,490	14,790	16,640	15,540	54,340
(-) Beginning finished goods inventory	1,740	1,890	2,190	2,040	1,740
Required production in units	11,750	12,900	14,450	13,500	52,600