Question

Use the information below for Nuthatch Corporation to answer the question that follow.

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business—September, October, and November—are $237,000, $307,000, and $423,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.

The cash collections expected in November from accounts receivable are projected to be

a.$236,880

b.$335,832

c.$279,860

d.$193,900

Use the information below for Product A and Product B to answer the question that follow.

Next year’s sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units.

Budgeted production of Product B for the year would be

a.24,500 units

b.26,500 units

c.23,200 units

d.22,500 units

do not answer

Answer 1

1.) The Answer is Option c.) $ 279,860 Cash collections for November from Accounts Receivable = November Sales x 70% x 80% + October Sales x 70% x 20% = 423,000 x 70% x 80% + 307,000 x 70% x 20% = $ 2,79,860

2.) The Answer is Option d.) 22,500 Units Budgeted Production of Product B for the year = Sales forecast units + Desired ending inventory units - Beginning inventory units = 22,000 +3,000 - 2,500 = 22,500 Units