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Mitchell Company had the following budgeted sales for the first half of next year: Cash Sales Credit Sales January $40,000 $140,000 February $45,000 $160,000 March

Mitchell Company had the following budgeted sales for the first half of next year:

Cash Sales Credit Sales
January $40,000 $140,000
February $45,000 $160,000
March $47,000 $120,000
April $52,000 $147,000
May $62,000 $190,000
June $70,000 $370,000

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

Collections on credit sales:
30% in month of sales
35% in month of following sales
35.0% in second month following sales

Assume that the accounts receivable balance on January 1 was $87,000. Of this amount, $70,000 represented uncollected December sales and $17,000 represented uncollected November sales. Given these data, the total cash collected during January would be:

$207,000

$199,000

$134,000

$100,000

Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Beginning Inventory Ending Inventory
Finished goods (units) 27,000 77,000
Raw material (grams) 57,000 47,000

Each unit of finished goods requires 3 grams of raw material.

If the company plans to sell 740,000 units during the year, the number of units it would have to manufacture during the year would be:

740,000 units

683,000 units

817,000 units

790,000 units

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