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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Question
Please do not give solution in image format thanku
![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.](/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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education