he marketing department of XYZ Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): Activity Cost Pool (Activity Measure) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 9000 10000 11000 12000 The selling price of the company’s product is $19.00 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 $65,800. The company expects to start the first quarter with 1,350 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,900 units. Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole (prepare a Sales Budget). 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole (prepare a Schedule of Expected Cash Collections). 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole (prepare a Production Budget).
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.
he marketing department of XYZ Corporation has submitted the following sales
|
Activity Cost Pool (Activity Measure) |
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
|
Budgeted unit sales |
9000 |
10000 |
11000 |
12000 |
The selling price of the company’s product is $19.00 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
The company expects to start the first quarter with 1,350 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,900 units.
Required:
1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole (prepare a Sales Budget).
2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole (prepare a Schedule of Expected Cash Collections).
3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole (prepare a Production Budget).
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
