Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Transcribed Image Text:The marketing department of Jessi Corporation submitted the following sales forecast for next year (all sales are on account):
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
12,900
13,900
15,900
14,900
Budgeted unit sales
The selling price of the company's product is $28 per unit. Management expects to collect 75% of sales in the quarter in which
the sales are made and 20% in the following quarter; 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 $74,000.
The company expects to start the first quarter with 2,580 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 2,780 units.
Required:
1. alculate the estimated sales for each quarter and for the year as a whole.
2. Calculate the expected cash collections for each quarter and for the year as a whole.
3. Calculate the required production in units of finished goods for each quarter and for the year as a whole.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Total sales
Required 3
Calculate the estimated sales for each quarter and for the year as a whole.
2nd
Quarter
> Answer is complete but not entirely correct.
1st Quarter
$
361,200,000
$
38,920,000
3rd Quarter
$
445,200,000
< Required 1
4th Quarter
$
417,200,000
$
Year
1,612,800,000
Required 2 >
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