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Yuki888 [10]
2 years ago
13

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 Budgeted unit sales 12,500 13,500 15,500 14,500 The selling price of the company’s product is $24 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% 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 $73,200. The company expects to start the first quarter with 2,500 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 2,700 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.
Business
1 answer:
Fittoniya [83]2 years ago
4 0

Answer:

Jessi Corporation

                                        1st             2nd           3rd             4th

                                   Quarter      Quarter     Quarter    Quarter    Total

1. Sales                    $300,000  $324,000 $372,000 $348,000 $1,344,000

2. Expected cash

   collections          $298,200  $303,000 $343,800 $335,400 $1,280,400

3. Units to be

 produced                   12,700     13,900      15,300       14,100       56,200

Explanation:

a) Data and Calculations:

                                          1st             2nd           3rd             4th

                                      Quarter      Quarter     Quarter    Quarter    Total

Estimated unit sales     12,500       13,500      15,500      14,500        56,000

Ending Inventory            2,700         3,100       2,900        2,700          2,700

Units available for sale 15,200      16,600      18,400       17,200        58,700

Beginning Inventory      2,500        2,700        3,100         3,100          2,500

Units to be produced   12,700      13,900      15,300        14,100       56,200

Selling price = $24 per unit

Credit Sales            $300,000  $324,000 $372,000 $348,000 $1,344,000

Cash Collection:

75% in quarter       $225,000  $243,000 $279,000 $261,000 $1,008,000

20% ffg quarter          73,200      60,000      64,800     74,400      272,400

Total collection      $298,200  $303,000 $343,800 $335,400 $1,280,400

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