ABC Company is a manufacturer of Widgets.The Company's sales data for the first quarter of the upcoming year is as follows:

Budgeted Sales in units - Jan - 250,000; Feb - 210,000; Mar - 280,000; Apr - 285,000; May - 275,000

The selling price of each Widget is $117.

Distributors purchase Widgets on account.The percentage of sales collected in the month of sale is 55%.The percentage of sales collected in the month following the month of sale is 40%.The percentage of sales collected the second month following the month of the sale is 5%.The company doesn't have any bad debts.The accounts receivable balance at the beginning of the period is comprised of $725,000 from November Sales and $6,100,000 from December Sales.

The owner of the company realizes that excessive inventories tie up funds and create storage problems, but realizes the importance of having some inventory to fill unanticipated orders.His production manager has calculated that the ending inventory each month should be equal to 10% of the next month's sales to provide an adequate cushion.The finished goods inventory at the beginning of the period was 25,000 units.

Sales Budget Jan Feb Mar Total Apr May Budgeted Sales in units 250,000 210,000 280,000 1,300,000 285,000 275,000 Selling Price per Unit 117 $ 117 $ 117 $ 585 $ 117 $ 117 Total Sales 29,250,000 $ 24,570,000 $ 32,760,000 $ 152,100,000 $ 33,345,000 $ 32,175,000 Schedule of Expected Cash Collections Jan Feb Mar Total Apr May check figures Nov A/R Dec A/R $ Jan Feb Mar Total Cash Collections Production Budget Jan Feb Mar Total Apr May Budgeted Sales Add Desired Ending Inventory Total Needs Less Beginning Inventory Required Production