Question

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 12.200 2nd Quarter 13,200 3rd Quarter 15.200 4th Quarter 14,200 Budgeted unit sales The selling price sales are expected to be uncollectible. The beginning balance of accounts receivable, all The company expects to start the first quarter with 2,440 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 2,640 units. f the company's product is $21 per unit. Management expects to collect 65% f sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of $72,600. which is expected to be collected in the first quarter, Required: 1-a. Compute the company's total sales. Jessi Corporation Sales Budget 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter Year Budgeted units sales Selling price per unit Total sales Jessi Corporation Schedule of Expected Cash Collections 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning accounts receivable 1st Quarter sales 2nd Quarter sales 3rd Quarter sales 4th Quarter sales Total cash collections 2. Prepare the company's production budget for the upcoming fiscal year. Jessi Corporation Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted unit sales Total needs Required production in units

Answer 1

Jessi Corporation Sales Budget 1-a) Quarter-1 Quarter-2 Quarter-3 Quarter-4 Year Expected #Units of sale 54,800 (a) $21.00 12,200 13,200 15,200 14,200 $21.00 $21.00 $21.00 $21.00 Selling price per unit > (b) $256,200 $277,200 $319,200 $298,200 $1,150,800 --> (a) x (b) Expected Sales, dol lars Jessi Corporation 1-b) Expected cash collections Quarter-1 Quarter-2 Quarter-3 Quarter-4 Year Cash Collections from: $72,600 $166,530 $72,600 Given] Beginning balance Qtr-1 $256,200 x 65%; Qtr-2 $256,200 x 30% $76,860 $243,390 Quarter-1's Collection $180,180 $83,160 $263,340 [Qtr-1 = $277,200 x 65 %; Qtr-2 = $277,200 x 30% Quarter-2's Collection $207,480 $95,760 $303,240 [Qtr-1 = $319,200 x 65%; Qtr-2 $319,200 x 30%] Quarter-3's Collection $193,830 $193,830 [$298,200 x 65%] $1,076,400 Quarter-4's Collection X $239,130 $257,040 $290,640 Total Cash Receipts $289,590 NOTE: 65% will be collected in the mont of sale itself, 30% will be collected in the following month and 5% would be uncollectible, beginning balance is collected fully in Quarter-1 as per given instruction.

Jessi Corporation Production Budget 2) Quarter-1 Quarter-2 Quarter-3 Quarter-4 Year 13,200 14,200 Expected #Units of sale 12,200 15,200 54,800 Add: Desired ending F.G. inventory Total units required [Qtr-2=15,200 x 20%; Qtr-3=14,200 x 20%] 2,640 3,040 2,840 2,640 2,640 14,840 18,040 16,240 16,840 57,440 -3,040 Respective previous Qtr's ending bal.] Less: Beginning inventory units -2,440 -2,640 -2,840 -2,440 #Units to be produced 55,000 12,400 13,600 15,000 14,000