The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year:

1st Quarter2nd Quarter3rd Quarter4th QuarterBudgeted sales (units)8,00010,00012,00011,000

The selling price of the company's product is $20 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made and 30% in the following quarter; 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which are expected to be collected in the first quarter, is $80,500.

The company expects to start the first quarter with 2,000 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,250 units.

need:

1. need the company's sales budget and schedule of expected cash collections.

2.need the company's production budget for the upcoming fiscal year.

EXERCISE 7-3

Preparing Production and Direct Materials Budgets[LO2-CC6,7]

The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year:

1st Quarter2nd Quarter3rd Quarter4th QuarterBudgeted sales (units)8,0007,0006,0007,000

The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,700 units.

In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,120 kilograms and the beginning accounts payable for the first quarter are budgeted to be $14,820.

Each unit requires two kilograms of raw material that costs $4 per kilogram. Management desires to end each quarter with an inventory of raw materials equal to 20% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 3,140 kilograms. Management plans to pay for 75% of raw material purchases in the quarter acquired and 25% in the following quarter.

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Required:

1. need the company's production budget for the upcoming fiscal year.

2.need the company's direct materials budget and schedule of expected cash disbursements for materials for the upcoming fiscal year.

EXERCISE 7-4

Direct Materials and Direct Labour Budgets[LO2-CC7,8]

The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

1st Quarter2nd Quarter3rd Quarter4th QuarterUnits to be produced7,0008,0006,0005,000

In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 kilograms and the beginning accounts payable for the first quarter are budgeted to be $2,940.

Each unit requires two kilograms of raw material that costs $1.40 per kilogram. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 1,500 kilograms. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labour-hours, and direct labour-hour workers are paid $14 per hour.

need:

1. need the company's direct materials budget and schedule of expected cash disbursements for materials for the upcoming fiscal year.

2.need the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.