Question

Document1 - Word Mailings Review View Add-ins Help Tell me what you want to do . ANA 7.A. . O. AaBb cod AaBbCcDd AaBbc AaBbcc AaB 1 Normal 1 No Spac. Heading 1 Heading 2 Title Styles Paragraph he marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 2nd Quarter3rd Quarter4th Quarter Budgeted unit sales 11,000 12,000 14,000 13,000 The selling price of the company's product is $18.00 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 $70.200. The company expects to start the first quarter with 1,650 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 1.850 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. (com

Answer 1

a.
Calculation of estimated sales for each quarter of fiscal year and for year as a whole is shown below
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total
Budgeted unit sales	11000	12000	14000	13000	50000
Selling price per unit	$18.00	$18.00	$18.00	$18.00	$18.00
Estimated sales	$198,000	$216,000	$252,000	$234,000	$900,000
b.
Calculation of expected cash collection for each quarter of fiscal year and for year as a whole is shown below
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total
Same quarter collection - 65%	$128,700	$140,400	$163,800	$152,100	$585,000
	198000*65%	216000*65%	252000*65%	234000*65%
Selling price per unit	$70,200	$59,400	$64,800	$75,600	$270,000
Previous quarter collection - 30%		198000*30%	216000*30%	252000*30%
Estimated sales	$198,900	$199,800	$228,600	$227,700	$855,000
c.
Calculation of required production for each quarter and in total is shown below
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total
Budgeted unit sales	11000	12000	14000	13000	50000
Add: Desired ending inventory	1800	2100	1950	1850	1850
	12000*15%	14000*15%	13000*15%
Total finished goods required	12800	14100	15950	14850	51850
Less: Beginning inventory	1650	1800	2100	1950	1650
Budgeted production	11150	12300	13850	12900	50200