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 2nd Quarter 3rd Quarter 4th Quarter 12,600 Budgeted unit sales 13,600 15,600 14,600 The selling price of the company's product is $25 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 $73,400 The company expects to start the first quarter with 2,520 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 2,720 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. Celculate 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 3 Required 2 Required 1 Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 4th Quarter Year 3rd Quarter 2nd Quarter 1st Quarter Total sales Required 2 ed

Answer 1

Particulars Sales units Selling price Sales Quarter -1 Quarter -2 12600 13600 $ 25.00 $ 25.00 $315,000 $340,000 Quarter -3 15600 $ 25.00 $ 390,000 Quarter -4 14600 $ 25.00 $365,000 Year 56400 $ 25.00 $1,410,000 Cash Collection in Same Quarter @65% Next Quarter @30% Total Collection $ 204,750 $ 221,000 $ 253,500 $ 237,250 $ 916,500 73400 $94,500.0 $102,000.0 $117,000.0 $ 386,900 $278,150 $ 315,500 $ 355,500 $ 354,250 $1,303,400 Calculating Budgeted Production Particulars Quarter -1 Quarter -2 Quarter -3 Quarter -4 Year Sales units 12600 13600 15600 14600 Add : Closing Finished goods 27201 3120 2920 2720 Required units 15320 16720 18520 173201 Less : Opening Finished goods 2520 2720 3120 2920 Production units 12800 14000 15400 14400 56400 2720 59120 2520 56600