For the Quarter Ended March 31 Unit sales Multiply by: Sales price per unit Total sales revenue Cash sales Credit sales Total sales revenue Production Budget Units to be produced Multiply by: Quantity (board feet) of DM needed per unit Quantity (board feet) needed for production Plus: Desired ending inventory of DM Total quantity (board feet) needed Less: Beginning inventory of DM Quantity (board feet) to purchase Less: Beginning inventory of DM Quantity (board feet) to purchase Multiply by: Cost per board foot Total cost of DM purchases Cash sales in current month Collections on credit sales: 60% of credit sales made one month ago 30% of credit sales made two months ago 5% of credit sales made three months ago Total cash collections Review the direct materials budget prepared in Requirement 3 . Home Sweet Home Cash Payments for Direct Materials Budaet Data table More info In any given month, 20% of the tofil sales are cash sales, while the remainder are credit sales. The company's collection history indicates that 60% of credit sales is collected in the month after the sale, 30% is collected two months affer the sate, 5% is collocted three months affer the sate, and the remaining 5% is never collected Assume that the lotal cost of difoct materlals purchases in Decernber was $500,000. The company pays 40% of its direct materials purchases in the imonth of purchase, and pays the remaining 60% in the month after purchase. For the Quarter Ended March 31 Unit sales Multiply by: Sales price per unit Total sales revenue Cash sales Credit sales Total sales revenue Production Budget Units to be produced Multiply by: Quantity (board feet) of DM needed per unit Quantity (board feet) needed for production Plus: Desired ending inventory of DM Total quantity (board feet) needed Less: Beginning inventory of DM Quantity (board feet) to purchase Less: Beginning inventory of DM Quantity (board feet) to purchase Multiply by: Cost per board foot Total cost of DM purchases Cash sales in current month Collections on credit sales: 60% of credit sales made one month ago 30% of credit sales made two months ago 5% of credit sales made three months ago Total cash collections Review the direct materials budget prepared in Requirement 3 . Home Sweet Home Cash Payments for Direct Materials Budaet Data table More info In any given month, 20% of the tofil sales are cash sales, while the remainder are credit sales. The company's collection history indicates that 60% of credit sales is collected in the month after the sale, 30% is collected two months affer the sate, 5% is collocted three months affer the sate, and the remaining 5% is never collected Assume that the lotal cost of difoct materlals purchases in Decernber was $500,000. The company pays 40% of its direct materials purchases in the imonth of purchase, and pays the remaining 60% in the month after purchase
