Big Watches Co. makes one product and it provided the following information to help prepare the master budget for its first four months of operations: The budgeted selling price per unit is $81. Budgeted unit sales for September, October, November, and December are 20,000, 21,000, 18,000, and 19,000 units, respectively. All sales are on credit. 35% of credit sales are collected in the month of the sale and 65% in the following month. The ending finished goods inventory equals 15% of the following month’s unit sales. The ending raw materials inventory equals 26% of the following month’s raw materials production needs. Each unit of finished goods requires 13 pounds of raw materials. The raw materials cost $11.00 per pound. 25% of raw materials purchases are paid for in the month of purchase and 75% in the following month. What is the accounts receivable balance at the start of December? Round your answer to the nearest whole number.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
icon
Related questions
icon
Concept explainers
Question

Big Watches Co. makes one product and it provided the following information to help prepare the master budget for its first four months of operations:

  • The budgeted selling price per unit is $81. Budgeted unit sales for September, October, November, and December are 20,000, 21,000, 18,000, and 19,000 units, respectively. All sales are on credit.
  • 35% of credit sales are collected in the month of the sale and 65% in the following month.
  • The ending finished goods inventory equals 15% of the following month’s unit sales.
  • The ending raw materials inventory equals 26% of the following month’s raw materials production needs. Each unit of finished goods requires 13 pounds of raw materials. The raw materials cost $11.00 per pound.
  • 25% of raw materials purchases are paid for in the month of purchase and 75% in the following month.

What is the accounts receivable balance at the start of December?

Round your answer to the nearest whole number.

 
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning