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The marketing department of Kyle Corporation has submitted the following sales forecast for the upcoming...

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Accounting

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

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted sales (units) 8,500 10,500 12,500 11,500

The selling price of the companys product is $25 per unit. Management expects to collect 60% of sales in the quarter in which the sales are made and 35% 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 $85,500.

The company expects to start the first quarter with 2,250 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 2,500 units.

Required:

1-a. Prepare the company's sales budget.

1-b. Prepare the schedule of expected cash collections.

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

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