The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal wear (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,800 13,800 15,800 14,800 Budgeted unit sales. The selling price of the company's product is $27 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% 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 $73,800. The company expects to start the first quarter with 2,560 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 2,760 units. Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal wear (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,800 13,800 15,800 14,800 Budgeted unit sales. The selling price of the company's product is $27 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% 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 $73,800. The company expects to start the first quarter with 2,560 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 2,760 units. Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.

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 Jessi Corporation has submitted the following sales forecast for the upcoming fiscal
year (all sales are on account):
Budgeted unit sales.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
12,800
13,800
15,800
14,800
The selling price of the company's product is $27 per unit. Management expects to collect 65% of sales in the
quarter in which the sales are made, 30% 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 $73,800.
The company expects to start the first quarter with 2,560 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 2,760 units.
Required:
1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.
2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.
3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year
as a whole.

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