Exerclse $7-2$ Preparing Sales and Production Budgets $($LO$2-$ CC$6,7)($Algo$)$

The marketing department of Kyle Corporation has submitted the following sales forecast for the upcoming fiscal year:

The selling price of the company's product is $$27$ per unit. Management expects to collect $55\%$ of sales in the quarter in which the

sales are made and $40\%$ in the following quarter; $5\%$ of sales are expected to be uncollectible. The beginning balance of accounts

receivable, all of which are expected to be collected in the first quarter, is $$87,500.$

The company expects to start the first quarter with $2,350$ units in finished goods inventory. Management desires an ending finished

goods inventory in each quarter equal to $15\%$ of the next quarter's budgeted sales. The desired ending finished goods inventory for

the fourth quarter is $2,600$ units.

Required:

$1-$a$.$ Prepare the company's sales budget.

$1-$b$.$ Prepare the schedule of expected cash collections.

Prepare the company's production budget for the upcoming fiscal year.