7. A.

1. Below is budgeted production and sales information for Flushing Company for the month of December:

   	Product XXX	Product ZZZ
   Estimated beginning inventory	29,200 units	18,100 units
   Desired ending inventory	35,600 units	14,100 units
   Region I, anticipated sales	341,000 units	262,000 units
   Region II, anticipated sales	188,000 units	143,000 units

   The unit selling price for product XXX is $4 and for product ZZZ is $15. Budgeted sales for the month are

   a. $9,555,000

   b. $14,010,000

   c. $3,736,000

   d. $8,191,000

B,

1. Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:

   	April	May	June
   Manufacturing costs (1)	$155,800	$198,200	$211,100
   Insurance expense (2)	910	910	910
   Depreciation expense	1,840	1,840	1,840
   Property tax expense (3)	470	470	470

   (1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. (2) Insurance expense is $910 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). (3) Property tax is paid once a year in November.

   The cash payments expected for Finch Company in the month of May are

   a. $148,650

   b. $38,950

   c. $226,550

   d. $187,600

7. C.

1. Woodpecker Co. has $307,000 in accounts receivable on January 1. Budgeted sales for January are $938,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are

   a. $634,440

   b. $1,364,400

   c. $845,920

   d. $1,057,400