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 12,000 11,000 14,000 13,000 The selling price of the company's product is $18.00 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 $70,200. The company expects to start the first quarter with 1,650 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 1,850 units. Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 1 for guidance.) 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 1 for guidance.) 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 2 for guidance.)
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 12,000 11,000 14,000 13,000 The selling price of the company's product is $18.00 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 $70,200. The company expects to start the first quarter with 1,650 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 1,850 units. Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 1 for guidance.) 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 1 for guidance.) 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 2 for guidance.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Transcribed Image Text:EXERCISE 8-14 Sales and Production Budgets LO8-2, LO8-3
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
11,000 12,000 14,000 13,000
The selling price of the company's product is $18.00 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 $70,200.
The company expects to start the first quarter with 1,650 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 1,850 units.
Required:
1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 1 for guidance.)
2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to Schedule 1 for
guidance.)
3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole. (Hint: Refer to
Schedule 2 for guidance.)
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