The marketing department of Graber Corporation has submitted the following sales forecast for the upcoming fiscal year. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales ..... 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. 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 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.

The marketing department of Graber Corporation has submitted the following sales forecast for the upcoming fiscal year. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales ..... 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. 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 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.

Question

The marketing department of Graber Corporation has submitted the following sales forecast for the
upcoming fiscal year.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted unit sales .....
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.
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
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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