EXERCISE 7-10 Sales and Production Budgets [LO2, LO3] The marketing department of Graber Corporation has submitted the following sales forecast for the upcom- ing fiscal year: Budgeted unit sales. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 16,000 15,000 14,000 15,000 The selling price of the company's product is $22.00 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 $66,000. The company expects to start the first quarter with 3,200 units in finished goods inventory. Manage- ment desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's bud- geted sales. The desired ending finished goods inventory for the fourth quarter is 3,400 units. Required: 1. Prepare the company's sales budget and schedule of expected cash collections. Prepare the company's production budget for the upcoming fiscal year. 2.
EXERCISE 7-10 Sales and Production Budgets [LO2, LO3] The marketing department of Graber Corporation has submitted the following sales forecast for the upcom- ing fiscal year: Budgeted unit sales. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 16,000 15,000 14,000 15,000 The selling price of the company's product is $22.00 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 $66,000. The company expects to start the first quarter with 3,200 units in finished goods inventory. Manage- ment desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's bud- geted sales. The desired ending finished goods inventory for the fourth quarter is 3,400 units. Required: 1. Prepare the company's sales budget and schedule of expected cash collections. Prepare the company's production budget for the upcoming fiscal year. 2.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 1E: The sales department of Macro Manufacturing Co. has forecast sales for its single product to be...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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EXERCISE 7-10 Sales and Production Budgets [LO2, LO3]
The marketing department of Graber Corporation has submitted the following sales forecast for the upcom-
ing fiscal year:
Budgeted unit sales.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
16,000
15,000
14,000
15,000
The selling price of the company's product is $22.00 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 $66,000.
The company expects to start the first quarter with 3,200 units in finished goods inventory. Manage-
ment desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's bud-
geted sales. The desired ending finished goods inventory for the fourth quarter is 3,400 units.
Required:
1. Prepare the company's sales budget and schedule of expected cash collections.
2. Prepare the company's production budget for the upcoming fiscal year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F378d1a2b-4d55-4a40-9162-2199e0820ba7%2Fcbff3c4a-7f9d-4f9f-858c-28f6763b1629%2Fvy7ero_processed.jpeg&w=3840&q=75)
Transcribed Image Text:B
EXERCISE 7-10 Sales and Production Budgets [LO2, LO3]
The marketing department of Graber Corporation has submitted the following sales forecast for the upcom-
ing fiscal year:
Budgeted unit sales.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
16,000
15,000
14,000
15,000
The selling price of the company's product is $22.00 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 $66,000.
The company expects to start the first quarter with 3,200 units in finished goods inventory. Manage-
ment desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's bud-
geted sales. The desired ending finished goods inventory for the fourth quarter is 3,400 units.
Required:
1. Prepare the company's sales budget and schedule of expected cash collections.
2. Prepare the company's production budget for the upcoming fiscal year.
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