Question
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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