The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 11,500 2nd Quarter 12,500 3rd Quarter 14,500 4th Quarter 13,500 Budgeted unit sales The selling price of the company's product is $14 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 $71,200. The company expects to start the first quarter with 1,725 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 1,925 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 year (all sales are on account): 1st Quarter 11,500 2nd Quarter 12,500 3rd Quarter 14,500 4th Quarter 13,500 Budgeted unit sales The selling price of the company's product is $14 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 $71,200. The company expects to start the first quarter with 1,725 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 1,925 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

100%

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on
account):
3rd Quarter
14,500
2nd Quarter
4th Quarter
1st Quarter
11,500
Budgeted unit sales
12,500
13,500
The selling price of the company's product is $14 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 $71,200.
The company expects to start the first quarter with 1,725 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 1,925 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.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Total sales
< Required 1
Required 2 >

Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.
................. .........l..............................................................................................................d..................
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Year
Total cash collections
< Required 1
Required 3 >
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.
.....................................l................................................
................ .................................................................l............................
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Year
Required production in units
< Required 2
Required 3 >

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