The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year
Question:
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Budgeted unit sales
12,200
13,200
15,200
14,200
The selling price of the company’s product is $21 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 $72,600.
The company expects to start the first quarter with 2,440 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 2,640 units.
Required
1-A. Complete the company's sales budget.
Jessi Corporation - Sales Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Budgeted Units Sales
Selling Price Per Unit
Total Sales
1-B. Complete the schedule of expected cash collections.
Jessi Corporation - Schedule of Expected Cash Collections
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Beginning Accts Receivable
1st Quarter Sales
2nd Quarter Sales
3rd Quarter Sales
4th Quarter Sales
Total Cash Collections
2. Prepare the company’s production budget for the upcoming fiscal year.
Jessi Corporation - Production Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Budgeted Unit Sales
Total Needs
Required Production in Units
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer