TabComp Inc. is a retail distributor for MZB-33 computer hardware and related software and support services. TabComp prepares annual sales forecasts of which the first six months for 2016 are presented here. Cash sales account for 25% of TabComp's total sales, 30% of the total sales are paid by bank credit card, and the remaining 45% are on open account (TabComp's own charge accounts). The cash sales and cash from bank credit-card sales are received in the month of the sale. Bank credit-card sales are subject to a 4% discount deducted at the time of the daily deposit. The cash receipts for sales on open account are 70% in the month following the sale and 28% in the second month after the sale. The remaining accounts receivable are estimated to be uncollectible.

TabComp's month-end inventory requirements for computer hardware units are 30% of the next month's sales. A one-month lead time is required for delivery from the manufacturer. Thus, orders for computer hardware units are placed on the 25th of each month to assure that they will be in the store by the first day of the month needed. The computer hardware units are purchased under terms of n/45 (payment in full within 45 days of invoice), measured from the time the units are delivered to TabComp. TabComp's purchase price for the computer units is 60% of the selling price.

Required
1. Calculate the cash that TabComp Inc. can expect to collect during April 2016. Be sure to show all of your calculations.
2. TabComp Inc. is determining how many MZB-33 computer hardware units to order on January 25, 2016.
a. Determine the projected number of computer hardware units that will be ordered.
b. Calculate the dollar amount of the order that TabComp will place for these computer hardware units.
3. As part of the annual budget process, TabComp prepares a cash budget by month for the entire year. Explain why a company such as TabComp would do this.

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TabComp Inc. Sales Forecast for First Six Months of 2016 Hardware Sales January February March April May June Total Units 130 120 110 90 100 125 $675 Dollars S390,000 360,000 330,000 270,000 300,000 375,000 S2,025,000 Software Sales and Support $160,000 140,000 150,000 130,000 125,000 225,000 $930,000 Total Revenues S 550,000 500,000 480,000 400,000 425,000 600,000 S2,955,000