Mynor Corporation manufactures and sells a seasonal product that has peak sales in the third quarter. The following information concerns operations for Year $2$the coming year$$and for the first two quarters of Year $3$:

a$.$ The company$$s single product sells for $$8$ per unit. Budgeted sales in units for the next six quar$-$

ters are as follows $($all sales are on credit$)$

Year $2$ Quarters Year $3$ Quarters

$123412$

Budgeted unit sales $40,00060,000100,00050,00070,00080,000$

b$.$ Sales are collected in the following pattern: $75\%$ in the quarter the sales are made, and the re$-$ maining $25\%$ in the following quarter. On January $1,$ Year $2,$ the company$$s balance sheet showed $$65,000$ in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored.

c$.$ The company desires an ending finished goods inventory at the end of each quarter equal to $30\%$ of the budgeted unit sales for the next quarter. On December $31,$ Year $1,$ the company had $12,000$ units on hand.

Required

Prepare the following budgets and schedules for the year, showing both quarterly and total figures:

$1.$ A sales budget and a schedule of expected cash collections.

$2.$ A production budget.Mynor Corporation manufactures and sells a seasonal product that has peak sales in the third

quarter. The following information concerns operations for Year $2-$the coming year$-$and for

the first two quarters of Year $3$:

a$.$ The company's single product sells for $$8$ per unit. Budgeted sales in units for the next

six quar$-$

ters are as follows $($all sales are on credit$)$

b$.$ Sales are collected in the following pattern: $75\%$ in the quarter the sales are made, and

the re$-$ maining $25\%$ in the following quarter. On January $1,$ Year $2,$ the company's

balance sheet showed $$65,000$ in accounts receivable, all of which will be collected in

the first quarter of the year. Bad debts are negligible and can be ignored.

c$.$ The company desires an ending finished goods inventory at the end of each quarter

equal to $30\%$ of the budgeted unit sales for the next quarter. On December $31,$ Year $1,$

the company had $12,000$ units on hand.

Required

Prepare the following budgets and schedules for the year, showing both quarterly and total

figures:

A sales budget and a schedule of expected cash collections.

A production budget.

Answer