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erik [133]
2 years ago
13

Bonita Industries estimates its sales at 160000 units in the first quarter and that sales will increase by 27000 units each quar

ter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at
$2981500.

$4387000.

$5228500.

$6613938.
Business
1 answer:
drek231 [11]2 years ago
4 0

Answer:

The correct answer is $5,228,500

Explanation:

Solution

Given that:

The second Quarter sales  = 160000 + 27000 = 187000 units

The credit sales of second quarter = (sales units*sales price) *(100%- 40%) = 187000 * $25* 60% = $2,805,000.

Now,

The units of Third quarter sales = 187000 + 27000 = 214000 units

The cash Sales of third quarter = 214000*$25 *40% = $2,140,000

Thus,

The credit sales of third quarter = 214000*$25 *60% = 3,210,000

Hence,

The cash budgeted collection for third quarter = Cash sales of third quarter + (Credit sales of Third Quarter*70%) + (Credit sales of second quarter * 30%)

= $2,140,000 + ($3,210,000*70%) + ($2,805,000*30%)

= $2,140,000 + $2,247,000 + $841,500

= $5,228,500

Therefore the cash collections for the third quarter are budgeted at $5,228,500

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