Nike has submitted the following sales forecast for the upcoming year.

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Budgeted Sales (Units)

10,000

9,750

7,500

12,000

Selling price per unit is $15. Management expects to collect 75% of sales in the quarter in which the sale was made and the remaining amount in the next quarter. The beginning balance of accounts receivables is $70,500, in which all will be collected in the first quarter.

Nike expects to begin the first quarter with 1,300 units of finished goods inventory and is budgeted to have 1,125 sq. ft. of raw materials. Management desires an ending finished goods inventory in each quarter equal to 15% of the following quarter budgeted sales. It also has a desired ending raw materials inventory to be 10% of the following quarters production needs. The desired 4th quarter ending finished goods inventory balance is 1,750 and ending raw materials balance to be 6,600 sq. ft.

Each unit requires 1.25 sq. ft. of raw materials which have a cost of $1.10 per sq. ft.