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Budgeted Unit sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter ...

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Accounting

Budgeted Unit sales

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
11,000 12,000 14,000 13,000

The selling price of the companys product is $18.00 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 is expected to be collected in the first quarter, is $70,200.

The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarters budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.

Required:

  1. Calculate the estimated sales for each quarter and for the year as a whole.
  2. Calculate the expected cash collections for each quarter and for the year as a whole.
  3. Calculate the required production in units of finished goods for each quarter and for the year as a whole.
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