Pithead Products Ltd plans to sell its single product for 35 a unit. Credit plans for the

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Pithead Products Ltd plans to sell its single product for £35 a unit.

Credit plans for the next six months are as follows:

● 70 per cent of sales are made on credit and 30 per cent for cash.

Of the credit sales revenue:

● 40 per cent will be paid during the month of sale (with the customers claiming a cash

discount of 2 per cent of the amount owed);

● 40 per cent will be paid during the month following the month of sale;

● 18 per cent will be paid during the second month after the sale; and

● the remaining 2 per cent will prove to be bad debts and are expected never to be paid.

Sales volumes for the next few months are budgeted as follows:

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How much cash will be budgeted to be received from sales during October?

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Business Finance

ISBN: 9781292134406

11th Edition

Authors: Eddie McLaney

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